Zinc futures – November expiry – on the Multi Commodity Exchange (MCX) closed at ₹233.65 by the end of September. It was a clear breakout of the resistance at ₹230, technically, a bullish signal.
However, rather than appreciating further, the contract started to fall. Last week, it closed at ₹221.65. But considering the price action of the last two weeks, the downswing too seems to have lost traction. Because the November zinc futures has been oscillating in the ₹219-223 range.
- Also read: MCX-Zinc: Stuck in sideways range
Thus, zinc futures should breach either ₹219 or ₹223 to start trending.
A breakout of ₹223 will open the room for a rally to ₹230. Notably, the price region between ₹230 and ₹234 can act as a barrier. On the other hand, a fall below ₹219 can trigger another leg of downtrend, possibly to ₹210. Immediately below this is another support at ₹208.
Trade strategy
Considering the above conditions, traders need to wait for zinc futures to move out of the ₹219-223 range. Take fresh trade along the direction of the break of this range.