The price of zinc futures has been on a decline for over two weeks. Currently trading around ₹252/kg, the contract fell off the resistance at ₹262.
Last week, the attempt to rally was stopped by an intermediate resistance at ₹256, indicating that the bears have an upper hand at the moment.
From the current level of ₹252, there is a chance for zinc futures to drop more. The nearest notable support levels are at ₹246 and ₹243.
The price band of ₹243-246 is a good support and has remained true over the past year, successfully arresting the decline on several occasions. So, the potential downswing that we are likely to see now can be restricted to ₹243.
On the other hand, if zinc futures rally from the current level, it ought to decisively break out of the resistance at ₹262 to turn the trend bullish. Resistance above ₹262 is at ₹266.
Last week, we recommended short on zinc futures at an average price of ₹252.50 with a stop-loss at ₹258. Retain this trade. When the contract falls to ₹246, revise the stop-loss to ₹250. Book profits at ₹243.