Comments
Zinc futures contract on the Multi Commodity Exchange (MCX) has been falling for the past four months. However, currently trading at around ₹226, the contract is at a strong base – the price band of ₹225-230 is a solid support.
Nonetheless, the support alone does not confirm a trend reversal. Probably a rally past ₹240 can be taken as a sign of bullish reversal. In a case where the prices go above ₹240, the contract might rally towards the resistance at ₹262. If this level is taken out, the medium-term could also become bullish, potentially leading to an upswing to ₹300 or even to ₹325.
As it stands, there are no bullish confirmations yet. But there is a sign of weakening sell trend – the RSI and the MACD on the daily chart have started forming bullish divergences. However, as mentioned above, a rally over and above the resistance at ₹240 is needed as validation for traders before going long.
On the other hand, if the contract slips below the support at ₹225, we might see a quick decline to ₹200.
Trade strategy
We suggest traders to stay on the fence for now. Initiate fresh longs when the zinc futures break out of ₹240. Target and stop-loss can be at ₹260 and at ₹230 respectively.
Comments
COMMENT NOW
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.