Commodity Calls

MCX-Zinc signals a corrective fall

Gurumurthy K BL Research Bureau | Updated on October 30, 2018 Published on October 30, 2018

Traders who have taken long positions at ₹200 can exit the trade at current levels.

The zinc futures contract on the Multi Commodity Exchange is continuing to face resistance in the ₹200-₹205 region. The contract has been testing this zone continuously over the last three weeks. It rose to ₹202.95 per kg on Wednesday last week but has tumbled over 3 per cent since then. It currently trades at ₹196 per kg.

Though the contract has been broadly rangebound between ₹190 and ₹205 since the beginning of this month, the price action on the charts leaves the short-term outlook bearish. The weekly chart indicates that the MCX-Zinc futures contract is not getting fresh buyers to take it decisively above the psychological level of ₹200. This leaves the possibility high of the contract breaking below ₹190 in the coming days. Such a break can take the contract initially lower to ₹187 or ₹185.

A bounce from the ₹187-₹185 support zone can trigger a relief rally to ₹195. But a strong break below ₹185 will see the downmove extending to ₹180 or even lower levels.

Traders who have taken long positions at ₹200 can exit the trade at current levels.

The bearish outlook will get negated only if the contract manages to breach ₹205 decisively. Such a break will increase the bullish momentum and trigger a fresh rally to ₹213 and ₹217.

Trading strategy

Traders with a high risk appetite can use upticks to go short at ₹199 and ₹202. Stop-loss can be placed at ₹207 for the target of ₹183. Revise the stop-loss lower to ₹197 as soon as the contract moves down to ₹194.

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

Published on October 30, 2018

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!


Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.