Zinc futures on the Multi Commodity Exchange (MCX) has been on a decline since the beginning of this year. It met with a resistance at ₹235 in early January and fell over the past three weeks.
However, the price action over the past few sessions show that the downward momentum is fading. In fact, zinc futures has a rising trendline support at around ₹220.
The February futures of zinc bounced off this level and is now hovering between ₹222 and ₹223. We expect zinc futures to see an upswing on the back of the support at ₹220.
The chart indicates that the contract has its nearest resistance at ₹228, where both 20- and 50-day moving averages coincide. The probability is high for zinc futures to touch ₹228 in the near-term.
Traders can buy zinc futures at the current level of ₹223 and add longs if the price dips to ₹221. Place stop-loss at 218. Book profits at ₹228.