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The zinc futures contract on the Multi Commodity Exchange was volatile in the past week. The contract opened with a wide gap-down at ₹208 per kg last Tuesday (May 1) and fell to a low ₹198.7 on Friday. However, the contract has bounced back again from this low and is currently trading at ₹207 per kg.
Near-term view is positive
The strong bounce from the low of ₹198.7 is technically positive for the contract. This indicates that the contact is getting fresh buying interest around the psychological level of ₹200. The near-term outlook is positive. The current upmove is likely to extend towards ₹216 in the coming days. Whether the contract breaks above ₹216 or not will be key in deciding the next move.
Inability to breach ₹216 decisively and a subsequent pull-back from those levels can drag the contract lower. A fall to ₹210 or ₹205 is likely. Also, in that case there is a strong likelihood of the contract can remain in a sideways range between ₹200 and ₹216 for some time.
On the other hand, if the MCX-Zinc futures contract breaks above ₹216 decisively in the coming days, it can gain fresh momentum. Such a break will increase the possibility of the contract rallying towards ₹225.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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