Commodity Calls

MCX-Zinc hits a temporary barrier

Gurumurthy K BL Research Bureau | Updated on January 09, 2018

zinc

The Zinc futures contract on the Multi Commodity Exchange (MCX) is hovering around the psychological level of ₹200 a kg over the last one week. The key trend resistance at ₹204 has halted the rally and the contract has come-off in the past week after making a high of ₹203.4 on August 21. It made low of ₹195.05 on Friday and has managed to bounce slightly from there. The contract is currently trading at ₹199.

Key resistance is in the band between ₹200 and ₹201. If the contract breaks above ₹201, it can revisit the resistance at ₹204 in the coming days. A strong break and a decisive weekly close above ₹204 will increase the likelihood of the contract rallying to ₹215 levels over the medium term.

But if the MCX-Zinc futures contract fails to break above ₹201 in the coming days, it can remain under pressure. In such a scenario, the possibility of the contract falling to ₹190 in the coming days will remain high. Cluster of supports are in the range between ₹190 and ₹185. As such the downside could be limited to this broad ₹190-₹185 support zone. Dips to ₹190-₹185 will be a good opportunity for taking long positions from a medium-term perspective. Traders with a medium-term time frame can go long at ₹190 and accumulate at ₹188 or at ₹186 levels. Stop-loss can be placed at ₹183 for the target of ₹210.

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

Published on August 29, 2017

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