The zinc futures on the Multi Commodity Exchange (MCX) has been on a decline since early February. It started to decline after facing resistance at ₹300. However, the contract, currently trading at ₹262, near a strong support at ₹260.
Notably, zinc futures contract has rebounded off the support at ₹260, several times since September 2021. Therefore, we expect the bulls to capitalize on this base to gain traction and push the prices up. In such a case, the contract might rally to ₹277 in a couple of weeks. A breach of this can raise the contract to ₹300.
However, if the contract falls below ₹260, the outlook will turn bearish where we might see a decline to ₹242, a notable support. Subsequent support is at ₹225.
Last week, when the contract was trading at ₹268, we suggested traders to stay away and initiate longs if only the price drops to ₹260.
This order would have been triggered on March 8th. Those who have taken this position can retain it. Stop-loss is at ₹245. When the contract moves above the minor hurdle at ₹277, revise the stop-loss upwards to ₹270. Further tighten the stop-loss to ₹278, when the price rises above ₹286. Book profits at ₹295.
Fresh longs can also be initiated with the same target and stop-loss levels as mentioned above.