Zinc price has been inching up slowly over the last three weeks. The Zinc Futures contract on the Multi Commodity Exchange (MCX) has risen over 6 per cent from around ₹271 per kg in the last three weeks. It is currently trading at ₹289 per kg.
Outlook
The bias on the chart is positive. The bounce from the mid-November low of ₹270.40 has happened from near the 100-Day Moving Average support. This rise has taken the contract well above a key intermediate resistance level of ₹282. Support is in the ₹283-₹282 region. The next resistance is around ₹291. The chances are high for the contract to break this resistance in the coming days. Such a break can take the MCX Zinc Futures contract up to ₹305 in the coming weeks.
To negate this rise, the contract has to fall below ₹281. If that happens, the outlook will turn negative and a fall to ₹275-₹273 can be seen. However, the price action on the charts indicates that a fall below ₹281 is less likely.
Trade Strategy
Traders can go long now at ₹289. Accumulate on dips at ₹284. Keep the stop-loss at ₹278. Trail the stop-loss up to ₹291 as soon as the contract moves up to ₹294. Move the stop-loss further up to ₹295 when the contract touches ₹298. Exit the long positions at ₹302.