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Zinc futures on the Multi Commodity Exchange (MCX) appreciated last week and posted a second consecutive weekly gain. But on Friday, after marking a three-week high of ₹224.7, the price moderated. The contract is now trading around ₹221.
While there is no sign of an immediate reversal, the overall trend is bearish. Also, ₹225 is a hurdle for the bulls. Notably, the price band of ₹225-230 is a resistance region.
On the back of the barrier, if the contract falls from the current level, it can find support at ₹215. Immediately below these levels, the supports are at ₹215 and ₹210.
Alternatively, if the zinc futures regain traction and rallies past ₹230, it can probably extend the rally to ₹250. Resistance above ₹250 is at ₹262.
Trade strategy
We had suggested going long on zinc futures a few weeks back when it was trading at ₹212. Target and stop-loss are at ₹232 and ₹200, respectively. After our buy call, the contract moderated to ₹205 and then moved up. It is now trading at near ₹221.
Risk averse traders can book profits at the current level of ₹221.
Others can hold the longs but revise the target down to ₹230. Also, revise the stop-loss from ₹200 to ₹217 so that some amount of profit is protected.
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