Zinc prices have been oscillating up and down in a narrow range over the last few days. The Zinc futures contract on the Multi Commodity Exchange (MCX) has been range-bound between ₹271 and ₹277 per kg over the last few days. Within this range, the contract is currently trading at ₹276 per kg.
Outlook
The near-term outlook is positive. Supports are at ₹271 and ₹269. As long as the contract trades above these supports, there is a good chance for a rise to ₹282 in the coming days.
However, the region around ₹282 is a strong resistance. Failure to breach ₹282 and a reversal thereafter can drag the MCX Zinc futures contract down to ₹270 levels again. A new leg of fall beyond ₹269 would be bearish for the contract.
In that case, the MCX Zinc Futures contract will come under pressure for a steep fall. That will open the doors for the contract to see a downside of ₹255-250.
On the other hand, if the contract breaches ₹282 decisively, it can gain momentum. Such a break can take the Zinc futures contract up to ₹295-300.
As such, the price action around ₹282 will need close watch in the coming days.
Trade Strategy
Since the future direction of the move will depend on what happens around ₹282, we suggest that traders stay out of the market for now.
