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The zinc futures contract on the Multi Commodity Exchange (MCX) extended its upmove as expected in the past week.
The contract recorded a low of ₹212.6/kg on January 10 and has surged over 3 per cent from there to ₹219 now.
The overall uptrend remains intact. There is more room for this trend to extend to the target of ₹225 and ₹227 in the coming days. Traders can hold the long positions with a revised stop-loss at ₹210 for the target of ₹225.
Move the stop-loss higher to ₹218 as soon as the contract moves up to ₹221. A resistance is poised near ₹227.
Whether the contract breaks above this hurdle or not will decide the next move. Since the contract has been in a continuous upmove since December, there is a strong likelihood of it reversing lower from around ₹227.
So, traders holding long positions should remain cautious and can take profit in the ₹225-₹227 region.
A downward reversal from ₹227 can trigger a corrective fall to ₹220 or ₹218.
But if the contract manages to break above ₹227 decisively, it can gain momentum.
In such a scenario, the possibility of the contract targeting ₹235 or even higher levels over the medium-term will increase.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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