The upmove in the Zinc futures contract on the MCX is gaining strength. The contract has been in a strong uptrend since the beginning of the month. The contract surged about 6 per cent in the past week. The strong rally in the past week has taken the contract well above the key 100-DMA resistance level of ₹184. It is currently trading at ₹186 per kg.
The bullish outlook remains intact. However, key resistances are coming up for the contract which can halt the current upmove. Cluster of resistances are poised in the ₹190-192 region. The contract can move up in the near term to test this resistance zone.
If the MCX-Zinc futures contract reverses lower from the ₹190-192 resistance region, a pull-back move to ₹185 and ₹183 is possible. It will also keep the possibility high of the contract revisiting ₹180 and ₹175 levels. In such a scenario, the MCX-Zinc futures contract can remain in a sideways range between ₹165 and ₹195 for sometime.
On the other hand, if the contract manages to breach ₹192 decisively, it can gain fresh momentum. Such a break will then increase the likelihood of the contract targeting ₹197 and ₹200 levels.
Global trend
The Zinc (three-month forward) contract on the London Metal Exchange has risen in the past week breaking above the breaking above the key resistance level of $2,500 per tonne. It is currently trading at $2,588. The near-term view is positive. The contract can move up to $2,635 in the coming days. A decisive break above $2,635 can take it further higher to $2,700 and $2,730. But a pull back from $2,635 can drag the LME-Zinc contract $2,500 levels again.
(Note: The recommendations are based on technical analysis and there is a risk of loss in trading)
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