Technical Analysis

MCX Zinc: Traders can stay away from the market

Gurumurthy K BL Research Bureau | Updated on January 08, 2018

The Zinc futures contract on the Multi Commodity Exchange (MCX) has rallied to ₹214 a kg in the past week as expected. The contract has been surging consistently over the last three weeks.

However, key resistances are poised near current levels and in the range between ₹217 and ₹218. Though these resistances can be tested in the coming days, whether the contract breaks above it or not will determine the next move. Traders can stay out of the market.

Inability to break above ₹218 and a subsequent downward reversal from there can drag the contract lower to ₹210 or even ₹205 thereafter on the back of profit booking.

The level of ₹205 is a strong support which is likely to halt the corrective fall.

On the other hand, if the contract manages to break above ₹218 decisively, it can gain further momentum. Such a break can take the contract higher to ₹220 initially.

Further break above ₹220 will increase the likelihood of the contract extending its rally to ₹230 and ₹235 levels thereafter.

Since the contract has been surging higher consistently, the possibility is high of it reversing lower in the coming days. The bias is to see a corrective fall to ₹210 or ₹205 before the uptrend resumes to target higher levels.

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

Published on October 03, 2017

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