The Zinc futures contract on the Multi Commodity Exchange (MCX) has skyrocketed 7.7 per cent in the past week. The contract made a high of ₹203.4 a kg on Monday and has slightly declined from there. However, it continues to hover above the psychological level of ₹200. A key trend resistance is at ₹204. Inability to break above this hurdle and a fall below ₹200 can see a corrective fall to ₹196 – a key support in the coming days. An upward reversal from there can keep the contract range bound between ₹196 and ₹204 for some time. But a decisive fall below ₹196 might intensify the selling pressure in the contract. In such a scenario, the contract can fall to ₹190 or ₹188 in the short term.

But the indicators on the chart signify that the bias is bullish and thus keeps the possibility less of the contract breaking below ₹196 in the coming days. Moreover, this signals that dips to ₹196 might find buyers coming into the market. As such, traders can wait for dips and go long at ₹197. Stop-loss can be placed at ₹193 for the target of ₹204. Revise the stop-loss higher to ₹199 as soon as the contract moves up to ₹201.

On the other hand, if MCX-Zinc futures contract manages to surpass the immediate resistance level of ₹204, it can gain momentum. Fresh buying interest might emerge on a strong break above ₹204 that can boost the momentum and pave way for the contract heading to the next targets of ₹205 and ₹210.

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

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