The Zinc futures contract on the Multi Commodity Exchange (MCX) has reversed higher in the past week. The contract fell to a low of ₹199.2/kg on October 17 and has bounced back from there. This bounce-back has happened from a key 55-day moving average support level leaving the short-term bias positive.

The contract is currently trading at ₹210 per kg. Immediate resistance is at ₹211. A strong break above this resistance can take the contract higher to ₹215 initially. A further break above ₹215 will pave the way for the next target of ₹220.

Short-term traders with a big risk appetite can go long on a break above ₹211. The stop-loss can be placed at ₹207 for the target of ₹219. Revise the stop-loss higher to ₹213 as soon as the contract moves up to ₹215.

The level of ₹220 is a key resistance which is likely to limit the upside in the short term. A pull-back from there can drag the contract lower to ₹215.

A further break below ₹215 will increase the likelihood of the contract falling to ₹200 levels again. In such a scenario, a range-bound move between ₹200 and ₹220 can be seen for some time.

The outlook for the contract will turn negative only if it records a decisive close below ₹200. It can fall to ₹195 or ₹192 thereafter. But such a fall looks less probable at the moment.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading.

Related Topics
comment COMMENT NOW