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Zinc was volatile for the first couple of months this year and consequently, its continuous contract on the Multi Commodity Exchange (MCX) saw considerable amount of price swing. But towards the end of March, the contract stabilised and began moving upwards.
As a result, the futures made a fresh high of ₹262.85 during the final week of September. However, over the past one year, the contract slid and now it is hovering around ₹254.
In the forthcoming sessions, the contract may not see further decline as it has good support in the price range of ₹250 and ₹252. At these price levels, both 21- and 50-day moving averages (DMAs) coincide making the support stronger.
Hence, zinc futures can be expected to go up in the coming sessions and retest the previous high of ₹262.85. A breach of this level can intensify the rally wherein it could touch ₹270, which can act as a resistance. Subsequent resistance is at ₹275.
Considering this, traders can go long at current levels with stop-loss at ₹245. Revise the stop-loss upward to ₹255 if the contract decisively breaches ₹263 and look for targets at ₹270 and ₹275. On the other hand, if the contract slips below ₹250, it can fall to ₹245 – a strong support.
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