Zinc prices have recovered well in the past week. The zinc futures contract on the Multi Commodity Exchange (MCX) made a low of ₹242.70 per kg on Monday last week before rising to currently trade at ₹257 per kg.
Outlook
The recent bounce landed just below the key trendline support of ₹247. Immediate support is near ₹250. As long as the contract trades above this support, the outlook will remain bullish.
MCX zinc futures contract can rise to ₹280-285 in a month or two. The price action thereafter will need a close watch. A decisive break above ₹285 will be very bullish from a long-term perspective. But if the contract fails to breach ₹285 and declines instead, it will turn the outlook bearish. In that case, the contract can fall back to ₹250-245 again.
The rise to ₹280-285 will be negated if the contract falls below ₹245, and this can further drag the contract down to ₹237-235. However, at the moment, a fall below ₹245 looks less probable.
Trade strategy
Traders can go long now at ₹257. Accumulate on dips at ₹252. Keep the stop-loss at ₹247. Trail the stop-loss up to ₹260 as soon as the contract moves up to ₹263. Move the stop-loss further up to ₹265 when the price touches ₹268. Exit the long positions at ₹270.
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.