Zinc futures (December contract) on the Multi Commodity Exchange (MCX) have declined since mid-November. It started to fall after facing resistance at ₹235.
Last week, the contract broke below the support at ₹220. Early this week, zinc futures marked a low of ₹214.95 but recovered to close at ₹217.15 on Monday.
The bounce in price is likely to be a corrective one. The near-term trend will only change only if the bulls lift zinc futures above ₹225, where the 20- and 50-day moving averages coincide.
Given the prevailing price action, we anticipate the contract to move up to ₹220 and resume the fall. In such a case, zinc futures could decline to ₹212, a support.
Trade strategy
Short zinc futures at ₹220. Target and stop-loss can be at ₹212 and ₹223, respectively. As a risk management measure, tighten the stop-loss to ₹218 when the price slips below ₹215.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.