The Zinc futures contract on the Multi Commodity Exchange has been stuck in a sideways range over the last several weeks. The contract has been broadly range-bound between ₹198 and ₹218 per kg for more than two months. Within this range the contract has been stuck in narrow range between ₹204 and ₹212 over the last few weeks. It is currently trading at ₹210 per kg.

The sideways movement keeps the immediate outlook mixed for the contract. A breakout on either side of ₹204 or ₹212 will decide the next near-term move. A strong break below ₹204 can pull the contract lower to ₹202 or ₹199. On the other hand, if the contract breaks above ₹212 it can move up to ₹216 or ₹218 – the upper end of the broader range.

However, a clear trend for the MCX-Zinc futures contract will emerge only after the contract breakout on either side of its broader ₹198-₹218 range. Until then traders can stay out of the market.

Bullish bias

On the charts, a strong long-term trend-line support is poised at around ₹198. A dip to test this support in the short term cannot be ruled out. But a break below ₹198 looks unlikely at the moment. This leaves the possibility high of the contract breaking the ₹198-₹218 range above ₹218 in the coming weeks. Such a break above ₹218 will boost the momentum and will take the contract higher to ₹222 or ₹225 initially. Further break above ₹225 will then pave way for the next medium-term targets of ₹230 and ₹240.

This bullish outlook will get negated only if the contract breaks below ₹198 decisively. Such a break can drag the contract lower to ₹190 or 188.

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

Related Topics
comment COMMENT NOW