The Zinc futures contract on the Multi Commodity Exchange (MCX) which was stuck inside the ₹175-₹185 a kg sideways range over the past few weeks was broken last week. The contract has risen sharply breaking the range above ₹185 and made a high of ₹190.2 on August 9. However, the contract has come-off from this high and is currently trading at ₹186.75 .

The level of ₹185 will now serve as a good support for the contract. Next key support is at ₹183. This support in the ₹185-₹183 zone is likely to limit the contract’s downside in the near term. Though a test of this support zone in the coming sessions cannot be ruled out, however an immediate fall breaking below ₹183 is unlikely. The outlook will remain bullish as long as the contract trades above ₹183. An eventual reversal from the ₹185-₹183 support zone can take the contract higher to ₹190 once again. A strong break above ₹190 will see the up move extending to ₹193 and ₹195 initially. Such a rally will also increase the possibility of the contract revisiting ₹200 levels over the medium term.

High-risk appetite traders with a medium-term perspective can go long at current levels. Stop-loss can be placed at ₹182 for the target of ₹194. Accumulate long positions on dips near ₹184. Revise the stop-loss higher to ₹189 as soon as the contract moves up to ₹191.

The bullish outlook will get negated only if the contract declines below ₹183. The next targets are ₹180 and ₹178.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading

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