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Zinc futures on the Multi Commodity Exchange (MCX) has been charting a sideways trend since early October. The November contract has been oscillating between ₹275 and ₹290.
The contract has been facing selling pressure since the beginning of this week. Consequently, it slipped below the support at ₹275 on Wednesday, turning bearish.
The prevailing price action indicates that zinc futures might drop to ₹255 in the near-term. Support below ₹255 can be spotted at ₹242.
On the other hand, if the contract recovers from the current level of ₹273, it can face a barrier at ₹ 285 and ₹290. Only a clear breach of ₹290 can turn the trend bullish. In such a case, the price can rise to ₹320 or even to ₹340, notable resistance levels.
Trade strategy
Since zinc futures has started to exhibit bearish bias, traders holding long positions can consider exiting.
Go short now at ₹273 with a stop-loss at ₹285. When the price falls to ₹260, tighten the stop-loss to ₹268. Book profits at ₹255.
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