Zinc futures on the Multi Commodity Exchange (MCX) has witnessed a quick fall in price over the past week. It declined after facing a resistance between ₹225 and ₹230. On Wednesday, the contract fell below a support at ₹213 and this has opened the room for further fall in price.
As it stands, the chances of zinc futures falling to the support at ₹200 is high. After touching this level, we might see a bounce in price, possibly to ₹210. But in case the contract falls below the support at ₹200, it is likely to trigger another downswing where the price could decline to ₹180.
Note that as long as the contract lies below ₹230, the bias will be bearish.
Trade strategy
Short zinc futures at the current level of ₹210 and add more shorts in case the price inches up to ₹213. Initial stop-loss can be at ₹218.
When the contract drops below ₹205, tighten the stop-loss to ₹210. Book profits at ₹200.