Zinc price has recovered very well last week. The Zinc Futures traded on the Multi Commodity Exchange (MCX) had risen about 3 per cent. It is currently trading at ₹271 per kg.
Outlook
The rise last week is significant. It has happened from a very important support around ₹260. It is now important to see if the contract is getting a strong follow-through rise this week or not.
Support is now around ₹266. The Zinc contract has to sustain above this support to keep the bias positive. Resistance is around ₹273. A strong break above it can boost the momentum. Such a break can take the MCX Zinc Futures contract up to ₹280 and even ₹285 in the coming weeks.
The contract can revisit ₹260 levels if it declines below the support at ₹266. However, the selling pressure will increase only if the contract breaks below ₹260 decisively. If that happens, the MCX Zinc Futures contract can fall to ₹250.
Trade Strategy
Traders can go long on a break above ₹273. Keep the stop-loss at ₹268. Trail the stop-loss up to ₹276 as soon as the contract goes up to ₹278. Move the stop-loss further up to ₹279 when the contract touches ₹281. Exit the long positions at ₹283.