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The Zinc Futures contract on the Multi Commodity Exchange (MCX) is hovering above a crucial long-term trend line support. This support obtained by joining the major lows from the 2020 low is coming up at around ₹301 per kg. It was tested last week and has held l on its first test. The contract made a low of ₹310 and had attempted to rise. But this bounce seems to lack strength. The MCX Zinc is facing resistance in the ₹323-₹325 region.
Regain bullish momentum
The contract made a high of ₹322.35 on Tuesday and has come down slightly. It is currently trading at ₹311 per kg. A strong rise past ₹325 will be needed to regain the bullish momentum and rise to ₹345-₹350 and even higher levels in the coming weeks. But based on the price action on the charts, we see high chances of a break below ₹301 in the coming days. Such a break can drag the contract down to ₹290 initially.
That will indicate a trend reversal and will turn the broader outlook bearish. It will also open doors for a deep fall going forward. A break below ₹290 will increase the downside pressure and will intensify the fall. That break can then drag it down to ₹250-245. Traders can go short at current levels. Accumulate on a rise at ₹319. Keep the stop-loss at ₹333. Trail the stop-loss down to ₹304 as soon as the contract falls to ₹296. Move the stop-loss further down to ₹283 as soon as the contract touches ₹272 on the downside. Book profits at ₹263.
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