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Zinc futures (continuous contract) on the Multi Commodity Exchange (MCX) began its recent leg of downtrend after facing resistance at ₹235 by mid-November. The contract closed at ₹220.5 on Monday.
In the first half of Tuesday’s session, zinc futures slipped below ₹220 and this strengthens the case for bears. The nearest support from the current level is at ₹217. Subsequent support is at ₹212.
In case zinc futures recover from the current level, it is likely to face resistance at ₹225. Above this level, there is a barrier at ₹230. However, the chances for an upswing in price from the current level is slim.
Trade strategy
We suggested initiating short positions at ₹226 last week. Since the contract has now dropped below ₹220, traders can revise the stop-loss down from ₹235 to ₹220. Book profits at ₹217.
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