The Zinc futures contract on the Multi Commodity Exchange (MCX) is continuing to get support around ₹180 per kg. The contract dipped to a low of ₹181.35 in the initial part of last week and has reversed higher from there. The contract has surged 4.5 per cent from the lows and is currently trading at ₹189.5 per kg.

A near-term support is at ₹187. As long as the contract trades above this support, there is a strong likelihood of it moving up to ₹198 and ₹200 in the short term. The region between ₹198 and ₹200 is a crucial resistance zone. Whether the contract manages to breach ₹200 or not will decide the direction of the next move.

A strong break and a decisive close above ₹200 will boost the momentum. Such a break will take the MCX-Zinc futures contract higher to ₹205 and ₹207. But a pull-back from the ₹198-₹200 resistance zone can drag the contract lower to ₹192 and ₹190 thereafter.

The near-term view will turn negative only if the contract declines below ₹187. In such a scenario, a revisit of ₹180 levels is possible.

On the global front, the Nickel (3-month forward) contract on the London Metal Exchange (LME) has risen in the past week. Prior to this upmove the contract has been consolidating between $2,450 and ₹2,550 per tonne. It is currently trading at $2,600 per tonne.

Support is in the $2,565-$2,550 region. As long as the contract trades above this support, the near-term outlook will be positive. An upmove to test the $2,685-$2,700 resistance zone is likely in the coming days. A strong break above $2,700 will then pave the way for the next targets of $2,750 and $2,780.

Trading strategy

Short-term traders with high risk appetite can go long on MCX-Zinc futures contract at current levels and also accumulate on dips at ₹187.5. Stop-loss can be placed at ₹183 for the target of ₹199. Revise the stop-loss higher to ₹192 as soon as the contract moves up to ₹194.

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

Related Topics
comment COMMENT NOW