The zinc futures contract on the Multi Commodity Exchange (MCX) has been stuck in a narrow range between ₹174 and ₹182 per kg for more than two weeks. This leaves the immediate outlook unclear for the contract. The contract is currently hovering at the upper end of the range at ₹180 per kg.
A breakout on either side of ₹174 or ₹182 will decide the next move. A strong break above ₹182, will ease the downside pressure. Such a break will trigger a corrective rally to ₹192 on the back of short-covering. The region around ₹192 is crucial short-term resistance. The outlook will turn bullish only if the contract breaks above ₹192 decisively. Such a break will pave way for the next target of ₹200. But inability to breach ₹192 and a pull-back from this level can drag the contract lower to ₹180 levels again. In such a scenario, a range-bound move between ₹174 and ₹192 can be seen for some time.
On the other hand, if the MCX-Zinc futures contract breaks the current sideways range below ₹174, it will come under renewed pressure. Such a break can drag the contract lower to ₹170. Further break below ₹170 will then increase the likelihood of the contract tumbling to ₹165 and ₹160.
Trading strategy
Short-term traders who have taken short positions at ₹179 and ₹181 can hold it. Retain the stop-loss at ₹185 for the target of ₹167. Revise the stop-loss lower to ₹176 as soon as the contract moves down to ₹173.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.