Commodity Calls

Outlook bullish for MCX-Zinc

Gurumurthy K BL Research Bureau | Updated on January 11, 2018 Published on July 25, 2017
Zinc prices have fallen 30 per cent since May to five-year lows.

zinc



The Zinc futures contract on the Multi Commodity Exchange (MCX) has reversed higher, as expected, from the support at ₹175 a kg. The contract declined below a key support at ₹180 last week.

However, the contract has managed to reverse higher again after touching a low of ₹174.7 on Thursday. This leaves the overall bullish outlook intact.

The contract is currently trading at ₹182.6. Immediate resistance is at ₹183. Inability to break above this hurdle can trigger a pull-back to ₹180 or ₹177 once again.

In such a scenario, the contract may remain range bound between ₹175 and ₹183 for some time.

But if the contract manages to break above ₹183 decisively, it can rise to ₹185 initially. A further break above ₹185 will increase the likelihood of the contract extending its rally to ₹190 and to ₹195 thereafter.

Traders who have taken long positions on dips at ₹178 can hold their positions. Retain the stop-loss at ₹171 and revise it to ₹180 as soon as the contract moves up to ₹186.

The contract will come under pressure only if it breaks below the key 200-day moving average support level of ₹175 decisively. The next targets will be ₹173 and ₹170. But such a strong fall looks unlikely at the moment.

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

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Published on July 25, 2017
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