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The zinc futures on the Multi Commodity Exchange (MCX) have been falling since January. It saw its latest leg of downtrend over the past week after the corrective rally was blocked by the resistance at ₹255. It has now fallen to ₹232.
The price action is still bearish and there are no signs of a recovery. So, the contract will possibly extend the downtrend. The nearest notable support is at ₹225, and we expect zinc futures to touch this level within a week, post which there could be a recovery.
That said, zinc futures can turn the short-term trend bullish only if it breaks out of ₹262. Until then the bias will be bearish.
Trade strategy
We recommended going short on zinc futures last week at ₹252 and place stop-loss at ₹262. Since the price has slipped below ₹242, the revised stop-loss would now be at ₹250.
Traders can hold this trade but tighten the stop-loss further to ₹245 to protect some profits. Exit the shorts at ₹225 – a key support.
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