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The Zinc futures contract on the Multi Commodity Exchange (MCX) has been oscillating around ₹180 a kg for more than two weeks. Barring the spike in the past week to a high of ₹185, the contract has been broadly stuck in the band between ₹177 and ₹183. A breakout from this sideways consolidation will determine the next trend for the contract.
The bias is bullish on the chart. A key support is at ₹175. The contract will come under pressure only if it declines below this support.
But the presence of a trend-line as well as the 200-day moving average at around ₹175 makes it a strong support. This leaves a lower possibility of the contract breaking below ₹175 in the coming days even if it breaks the current sideways range below ₹177.
The MCX-Zinc futures contract is more likely to break the range above ₹183 in the coming days. Such a break can take it to ₹185 once again. A further strong break above ₹185 will pave the way for a fresh rally to ₹193 and ₹195.
Traders with a medium-term perspective can make use of dips to go long at ₹178. A stop-loss can be placed at ₹171 for the target of ₹195. Revise the stop-loss higher to ₹180 as soon as the contract moves up to ₹186.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading
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