Comments
Zinc futures (February contract) on the Multi Commodity Exchange (MCX) have been witnessing a sharp fall in price since the beginning of this month. It faced a barrier at ₹230 against which the downtrend began.
But after marking a low of ₹204.65 early this week, zinc futures have largely been moving sideways. Since ₹204 is a support, there is a chance for a corrective rise from the current level. Such a move can lift zinc futures to ₹218 – its 20-day moving average.
- Also read: MCX-Zinc: Bearish. Go short
After touching ₹218, the contract is likely to establish the next leg of downtrend. But rather than a corrective rise, if zinc futures falls from here and breaches the support at ₹204, we are likely to see a decline to ₹180.
Trade strategy
High risk appetite traders can buy zinc futures now at ₹209 with a stop-loss at ₹203. When the contract touches ₹215, tighten the stop-loss to ₹208. Exit at ₹218.
In case the stop-loss of the above long trade is hit, the support at ₹204 would have been broken. In such a case, go short with stop-loss at ₹210. Book profits at ₹180. As a risk management measure, once the price dips below ₹190 after this trade is initiated, alter the stop-loss to ₹196.
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.