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BL Research Bureau
Zinc prices were volatile during the first two months of this year and as a result, the continuous contract of zinc on the Multi Commodity Exchange (MCX) saw zig-zag price movement with no definite trend. Nevertheless, in April, the contract established a steady uptrend which has been pushing the price of the futures up with intermittent corrections. On this line, the contract, after hitting a high of ₹262.85, saw a decline in price. However, the support at ₹250 restricted the decline below this level.
The price level of ₹250 is important as the 21- day moving average (DMA) coincided at this level, making the support stronger. So, the bulls were quick to respond resulting in a considerable bounce. Last week, the contract rallied past the prior high of ₹262.85, opening the door for further strengthening. Today, the contract moved above the ₹270, which has been giving some tough time to the bulls for the past few trading sessions.
From here, the contract is likely to go up ₹285 initially. A clear breach of this level can make the job easier for the bulls to lift zinc futures to ₹300-mark. So, traders can go long at current level of ₹274 and accumulate more if it drops to ₹265. Place stop-loss at ₹255 and aim to partially exit at ₹285. Carry the remaining for the target of ₹300 with the stop-loss revised upwards to ₹275. If the contract rallies past ₹280 without declining to ₹265, place stop-loss at ₹265.
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