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The Zinc contract has been under pressure for the last three months. The Zinc Futures contract on the Multi Commodity Exchange (MCX) has been on losing streak over the last one week.
After making a low of ₹245.10 per kg on Monday, it registered a slight gain. The contract is currently trading at ₹248.20 per kg.
Outlook
The Zinc contract has been on a downward path since late January this year. In fact, the fall over the last one week indicates that a new leg of fall has begun.
Resistance for the contract is at ₹250. As long as the contract trades below ₹250, the contract will trade with a bearish bias.
The Zinc Futures contract can fall to ₹240-₹238 over the next two-three weeks unless it breaks above ₹250 decisively.
Also read: Nifty prediction for April 11, 2023: Go long on dips at 17,735 and 17,720
The Zinc futures contract has to breach ₹260 decisively to completely negate the chances of the fall to ₹240, indicating a reversal of negative trend.
If the contract breaches the ₹260-levels, the doors will open to test ₹270 and even higher levels. For now, such a strong rise above ₹260 looks less probable now. Indeed, we expect the contract to stay below ₹250 levels.
Trade strategy
Traders can go short now. Keep the stop-loss at ₹252. Trail the stop-loss down to ₹246 as soon as the contract falls to ₹244. Move the stop-loss further down to ₹244 when the contract touches ₹242 on the downside. Exit the short positions at ₹240.
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