Technical Analysis

MCX-Zinc can continue to move sideways

Gurumurthy K | Updated on March 09, 2018 Published on April 25, 2017

BL15-ZINC

The Zinc futures contract on the Multi Commodity Exchange (MCX) fell last week to test its crucial ₹161-₹160 a kg support region. This support zone is holding well as of now. The contract has bounced higher slightly after making a low of ₹161.9 on April 18. However, this bounce back move is not gaining strength. Also the 200-day moving average at₹170 is resisting the contract from extending its upmove. The contract tested this 200-day moving average resistance on Friday and has come-off from the high of ₹170.9. It is currently trading at ₹167.35 . The immediate outlook is not clear. The weekly candlestick chart suggests a possibility of a sideways move between ₹160 and ₹170 for some time. A breakout on either side of ₹170 or ₹160 will then decide the next leg of move for it.

A strong break below ₹160 will increase the downside pressure. Such break may drag the contract lower to ₹150-the 50 per cent Fibonacci retracement support level. On the other hand, if the MCX-Zinc futures contract manages to surpass the hurdle at ₹170 decisively, it can rise to ₹178 or ₹180 thereafter. Such a rally will keep intact the long-term uptrend that has been in place since January 2016. Further break above ₹180 will then pave way for a revisit of ₹200 or even higher levels over the medium-term.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading

Published on April 25, 2017
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