The chart shows that the price of zinc futures has been on a decline since May 23. It is currently trading around ₹252/kg.
The price action shows a clear bearish bias. The contract is not able to crack a falling trendline resistance and the price is below both 21- and 50-day moving averages.
From the current level, zinc futures will most likely witness a decline. The nearest support is ₹246. But we expect the contract to extend the downswing to ₹243.
After dropping to ₹243, there might be a rebound in price. But in case the support at ₹243 is breached, zinc futures can see a deeper fall, possibly to ₹233.
On the other hand, if zinc futures breaks out of the trendline, it can face a barrier at ₹256. Above this is another resistance at ₹262. Only a clear breach of this level can turn the outlook positive.
So, as it stands, the bears have an edge over the bulls.
Trade strategy
We recommended short on zinc futures at an average price of ₹252.50 on June 2. Hold on to this trade with a stop-loss at ₹258. When the contract falls to ₹246, revise the stop-loss to ₹250. Book profits at ₹243.