Zinc prices have been inching higher over the last few days. The Zinc Futures contract traded on the Multi Commodity Exchange (MCX) touched a low of ₹250 per kg last week and has been moving up since then. It is currently trading at ₹254 per kg.
Outlook
The price action over the last two weeks indicates that the MCX Zinc contract has formed a good base around ₹250. Also, the recent rise has taken price just above the key resistance level of ₹253. The region between ₹253 and ₹252 will now act as a good support zone. The presence of a trendline and the 21-Day Moving Average in this support zone makes it a strong one.
If the contract manages to sustain above ₹252, the bias will remain positive. In that case there are good chances to see a rise to ₹260 in the short term.
The level of ₹250 will continue to act as a strong support. The outlook will turn negative only if the contract breaks below this support. Such a break, though less likely now, can drag the MCX Zinc Futures contract down to ₹245-243 thereafter.
Trade Strategy
Traders can go long now at ₹254 and on dips at ₹253. Keep the stop-loss at ₹249. Trail the stop-loss up to ₹255 when the contract touches ₹257. Move the stop-loss further up to ₹257 when the price goes up to ₹259. Exit the long positions at ₹260.