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Zinc prices have been moving up very well since mid-December. The Zinc Futures contract on the Multi Commodity Exchange made a low of ₹214.95 kg in December. From there, the contract has surged over 8 per cent. It is currently trading at ₹233.50 per kg.
Key resistances are coming up now for the Zinc Futures contract. The hurdles are at ₹237 and ₹240. If the contract manages to breach ₹237, an extended rise to ₹240 can be seen this week. The price action thereafter will need a close watch.
Failure to break above ₹240 could turn the outlook bearish. A turn around from ₹240 and a subsequent fall below ₹237 can increase the selling pressure. In that case, the Zinc Futures contract will come under the danger of falling back to ₹225 and even ₹220.
On the other hand, a sustained break above ₹240 could boost the bullish momentum. Such a break will open the doors for an extended rise to ₹250 and higher levels going forward.
On December 20, we had suggested to go long at ₹225 and ₹223. This trade was given with a time frame of four weeks. The trailing stop-loss for this trade is now at ₹231. Hold on to the trade. Move the stop-loss up to ₹233 when the price touches ₹234.50. Exit the trade at ₹235.
Traders can then stay out of the market and watch the price action. See what happens to the resistances at ₹237 and ₹240. Trades can be taken accordingly.
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