Zinc prices have been struggling to rise. The Zinc futures contract traded on the Multi Commodity Exchange (MCX) continues to face strong resistance in the ₹225-226 per kg region. The contract made a high of ₹226.60 per kg on Tuesday. It is currently trading at ₹221 per kg.
Failure to breach the ₹225-226 resistance zone continues to keep the bias negative. Intermediate support is at ₹217. The chances for the contract to break this support in the coming days are high. Such a break can drag the Zinc futures contract lower to ₹210 in the short-term.
To avoid the fall, the contract has to sustain above ₹217. Subsequently, a strong rise past ₹226 is also needed to gain bullish momentum. Only then will the Zinc futures contract rise to ₹230-232.
The big picture shows the region around ₹210 is a strong support. As such, the expected fall can halt around ₹210. The Zinc futures contract could reverse higher again from around ₹210, and rise towards ₹215-220 again.
We had suggested taking short positions in Zinc futures earlier. The average holding rate is ₹223. We suggest holding the short position and following the same strategy.
Retain the stop-loss at ₹230. Revise the stop-loss lower to ₹220 when the price falls to ₹215. Exit the short positions at ₹210.