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Zinc prices have been declining over the last one week. The Zinc Futures contract on the Multi Commodity Exchange (MCX) rose to a high of ₹279.30 per kg last week and has declined sharply from there. It is currently trading at ₹269 per kg.
The short-term outlook is bearish. The MCX Zinc Futures contract has fallen below its 200-Day Moving Average (DMA), which is currently at ₹271. This is a bearish signal. The contract can now fall to ₹265. A break below ₹265 can drag it down to ₹262 and even ₹260 in the short-term.
The region between ₹262 and ₹260 is a strong support zone. We expect the current fall to halt there. A bounce from this ₹262-₹260 support zone can take the MCX Zinc Futures contract up to ₹270-₹275 again.
In case the contract declines below ₹260, the selling pressure can increase. In that case, a steep fall to ₹250 or even ₹240 could result. As such price action in the ₹262-₹260 support zone will need a close watch.
Traders can go short now at ₹269. Add more shorts on a rise at ₹271. Keep the stop-loss at ₹274. Trail the stop-loss down to ₹268 when the price falls to ₹266. Move the stop-loss further down to ₹265 when the price touches ₹264. Exit the short positions at ₹262.
Published on January 27, 2025
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