Zinc price continues to rise. The Zinc Futures contract on the Multi Commodity Exchange dipped to a low of ₹254.80 per kg and then has risen back sharply from there. It is currently trading at ₹264 per kg.
Outlook
The broader uptrend is intact. Strong support is now around ₹258. The MCX Zinc Futures contract can rise to ₹273-₹275 in a week or two. As mentioned in this column last week, the region around ₹275 is an important resistance. The chances of the current rally halting around ₹275 cannot be ruled out.
If the Zinc contract turns down from around ₹275, it can fall back to ₹260-₹255. But if the MCX Zinc contract manages to breach ₹275 decisively, then the upside can extend up to ₹290. As such the price action around ₹275 will need a close watch.
Trade Strategy
Last week we had suggested to go long on break above ₹262. This trade would have got triggered now. Hold on to this trade. Retain the stop-loss at ₹258. Trail the stop-loss up to ₹264 when the price touches ₹266. Move the stop-loss further up to ₹267 when the contract moves up to ₹269. Exit the long positions at ₹270.