Zinc futures, since October, has been charting a sideways trend. The price has been largely oscillating between ₹270 and ₹293. Within this price band, it saw a decline over the last three weeks but has rebounded a little in the recent sessions.

The January expiry rebounded from ₹277 and closed at ₹282.15 on Monday. It is currently trading around the middle of the range. But since the broader trend is positive, there is a chance that the contract might retest ₹293.

The contract can either rise to ₹293 from the current level of ₹282 or it might see a minor decline to ₹278 before heading to ₹293. 

If the contract decisively breaks out of ₹293, it can extend the rally to ₹315 or to ₹340. On the other hand, if zinc futures see a decline and breaches the support at ₹270, the short-term trend can turn bearish. In such a case, the price can slip to ₹250, a support.

Trade strategy

Buy zinc futures (January) if the price declines to ₹278. Place stop-loss at ₹268. When the contract rises to ₹288 after the trade is initiated, revise the stop-loss to ₹282. Exit at ₹293.

Published on December 31, 2024