The short-term outlook for the Zinc futures contract traded on the Multi Commodity Exchange (MCX) is bullish. The contract has risen sharply over the last two weeks, breaking above the crucial resistance level of ₹290. It is currently trading at ₹307.5 per kg. Though the broader outlook is bullish, a key resistance is coming up at ₹315. This level can be tested in the coming days. However, it might hold and cap the upside for now.
A pull-back from around ₹315 can take the contract down to ₹290, which will now act as a good resistance-turned-support level. It can limit the downside. A bounce from ₹290 can take the contract back to ₹300-₹315 in the next couple of weeks.
Traders with a short-term perspective can wait for dips. Go long at ₹298 and accumulate longs at ₹293. Keep the stop-loss ₹286. Trail the stop-loss up to ₹301 as soon as the contract moves up to ₹306. Move the stop-loss further up to ₹308 as soon as the contract touches ₹311. Book profits at ₹313.
There is a good chance the MCX Zinc Futures contract will consolidate in the ₹290-₹315 range for a few weeks. A breakout on either side of this range will then determine the next leg of move. A break above ₹315 can take the contract up to ₹340. On the other hand, a break below ₹290 will increase the downside pressure and drag the contract down to ₹275.