The price of zinc futures on the MCX (Multi Commodity Exchange) has been falling since mid-April from about ₹383. While there was a corrective rally from ₹305 to ₹340 in the second half of May, the contract resumed its downtrend. We had recommended initiating shorts at around ₹330 with initial stop-loss at ₹345.

In line with our expectations, the prices have fallen l and is currently hovering around ₹312. Based on the revisions, the current stop-loss will be at ₹338.

The bears seem to be losing traction with the price level of ₹310 offering good support. The RSI and the MACD on the daily chart are showing signs of a recovery, although not signalling bullish reversal.

One can liquidate half of the shorts at ₹312 and tighten the stop-loss to ₹326 i.e., a little above the hurdle at ₹325.

When the contract falls below ₹310, it can quickly drop to the support band of ₹286-292. Exit the remaining shorts at ₹292. There could be a bounce off from this price region.

On the other hand, if the contract breaks out of ₹325, it can rally to ₹340 – the nearest resistance. The subsequent resistance is at ₹350.