Zinc futures on the Multi Commodity Exchange (MCX) has been stuck in a range for nearly two weeks. The October contract has been moving between ₹264 and ₹272.
On Wednesday, the contract broke out of ₹272 and closed at ₹275, turning the outlook positive. Going ahead, we expect the contract to rise further.
The charts indicate that zinc futures are likely to touch ₹290 in the short-term. A breach of ₹290 can lift the contract to ₹300.
On the other hand, if the contract falls from the current level, it can find its first support at ₹272. Subsequent support is at ₹264.
Nevertheless, as it stands, zinc futures might see a minor decline from here, probably to ₹270. But it will eventually regain the bullish momentum and start moving towards the ₹290-300 price band.
Trade strategy
Buy zinc futures now at ₹275 and add longs if the price dips to ₹270. Place stop-loss at ₹264. When the contract rises to ₹285, revise the stop-loss to ₹280. Book profits at ₹290.
Traders who wish to take lesser risk can stay away for now and go long if the price drops to ₹270. Target, stop-loss and adjustments can be followed as mentioned above.