The support in the ₹205-207 band has held well for the zinc futures contract on the Multi Commodity Exchange (MCX) in the past week, as expected.
The contract made a low of ₹206.5 a kg on Thursday and reversed higher from there to a high of ₹214.35 on Monday. The contract has come-off slightly from the high and is currently trading at ₹211/kg. Immediate resistance is at ₹213.5.
As long as the contract trades below this resistance, a dip to ₹209.5, the 21-day moving average, is possible in the near-term. Further break below ₹209.5 will increase the likelihood of the down-move extending to ₹206 or ₹205.
The contract will gain fresh momentum only if it breaks above the resistance at ₹213.5 decisively. The next target is ₹216. Further break above ₹216 will then increase the likelihood of the rally extending to ₹218.5 or even to ₹221 going forward.
Traders can stay out of the market at the moment. Wait for dips and go long if the contract reverses higher from the ₹205-206 support zone. Keep stop-loss at ₹203 for the target ₹213. Revise the stop-loss higher to ₹208 as soon as the contract moves to ₹210.
The contract will come under pressure if it declines below ₹205 decisively. Such a break will increase the downside pressure. In such a scenario, the contract can fall to ₹197.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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.