While the major trend in zinc is bullish, there has been a considerable weakness seen in the base metal price movements, keeping the short-term trend bearish. The continuous contract of zinc on the MCX has been on a downtrend since mid-April. The price of the contract fell from about ₹380 to mark a three-month low of ₹301 on May 13.
But on getting support at f ₹300, the contract rebounded and is currently trading at around ₹330. Notably, it made a fresh five-week high of ₹339.8 last week before softening to the current level. Nevertheless, over the past week, the contract has been oscillating between ₹330 and ₹338.
The possibility of the contract moving past ₹340 is very low and zinc futures are likely to resume its downtrend anytime soon. It can drop to ₹322 initially, where the 50-day moving average lies. It is expected to decline to the support band of ₹286-292 in two months.
Traders can short zinc futures on the MCX at the current level of ₹330 with stop-loss at ₹345. When price drops below ₹322, revise the stop-loss to ₹338. When it touches ₹300, liquidate half of the total shorts on hold and tighten the stop-loss to ₹315. Book the remaining shorts when the price falls to ₹292 as there could be a bounce off at the support band of ₹286-292.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.