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The Zinc futures contract on the Multi Commodity Exchange (MCX) is showing an initial sign of reversal. The strong downtrend that was in place since February halted at a low of ₹161.90 per kg on April 18. The contract has managed to bounce from this low over the last couple of weeks and is currently trading at ₹170 per kg. The 200-day moving average resistance is at ₹171 and a key trend-line resistance is at ₹172. These are a crucial levels to watch in the near-term which will decide whether the contract will extend the current upmove or will reverse lower again. A strong break and a decisive close above ₹172 will ease the downside pressure. Such a break can take the contract higher to ₹178 in the coming days. If the contract manages to surpass ₹178, the upmove can extend to ₹181. On the other hand, if the MCX-Zinc futures contract fails to break above the ₹171-₹172 resistance zone and reverses lower, it may remain under pressure. The contract may fall to ₹165 or ₹162 once again. The level of ₹162 is a crucial support for the contract. A strong break and a decisive weekly close below ₹162 may increase the likelihood of the contract falling to ₹155 or even ₹150 thereafter.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading
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