The Zinc futures contract traded on the Multi Commodity Exchange (MCX) seems to be forming a base above ₹260 per kg. The contract fell to a low of ₹266.75 last week and is attempting to bounce. It is currently trading at ₹274.65 per kg.
There is a resistance at ₹280-₹282. The contract has to rise past ₹282 decisively to boost the bullish momentum. Failure to rise past ₹282 and a pull-back can drag the Zinc futures contract down to ₹265 and ₹260 again. However, a sustained fall below ₹260 is less likely.From a bigger picture, as long as the Zinc contract trades above ₹260, the overall outlook is positive. As such we can expect the contract to breach ₹282 eventually and rise to ₹300 in the coming weeks.However, whether this rise can happen immediately or after one more leg of fall to ₹260 is not very clear. So we will have to wait and watch the price action in the coming days to get clarity.
Trading Strategy
Traders can wait for a dip and go long at ₹270. Accumulate longs at ₹264. Keep the stop-loss at ₹257. Trail the stop-loss up to ₹274 as soon as the Zinc futures contract moves up to ₹284. Move the stop-loss further up to ₹282 as soon as the contract touches ₹288 on the upside. Exit the long positions at ₹295.SHARE
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