Zinc prices have been stuck in a sideways range for almost a month now. The Zinc Futures contract on the Multi Commodity Exchange (MCX) has been oscillating between ₹219 and ₹230 per kg over the last few weeks. The contract is currently trading at ₹221 per kg.
Outlook
The sideways range remains intact. Going forward, we expect the downside to be limited to ₹219. If the Zinc Futures contract manages to sustain above ₹219, a fresh rise to ₹227 and ₹230 can be seen over the next one-two weeks.
We have to wait for a breakout on either side of ₹219-₹230 range to get a cue on the next leg of move. A break below ₹219 can take the contract down to ₹217. A further break below ₹217 will increase the downside pressure. Such a break can drag the Zinc Futures contract to ₹212 and ₹210 going forward.
On the other hand, a decisive break above ₹230 can boost the bullish momentum. In that case, the contract can rise to ₹235 and ₹240.
Trade Strategy
We had recommended short positions earlier a couple of weeks back at around ₹223. We suggest traders to exit the short positions with a minimum profit at current levels.
Fresh long positions can be taken at ₹220 and ₹218. Keep the stop-loss at ₹216. Trail the stop-loss up to ₹222 as soon as the contract moves up to ₹224. Move the stop-loss further up to ₹224 when the contract touches ₹226. Exit the long positions at ₹228