Zinc futures have been on a decline since mid-December after finding resistance at ₹293. While the price has been flat for the last few sessions, the bearish bias exists.
Notably, the February futures are facing a trendline resistance and the price is below both 20- and 50-day moving averages. All the resistance points lie between ₹268 and ₹270.
So, from the current level, the likelihood of a fall is high. The nearest support can be spotted at ₹260. A breach of this can drag zinc futures to ₹255.
On the other hand, if the contract rises and surpasses the barrier at ₹270, the short-term trend can turn bullish. In such a case, zinc futures can rally to ₹278 and then possibly to ₹283.
Broadly, at the current juncture, the inclination is bearish.
Trade strategy
Short zinc futures at ₹268 and place a stop-loss at ₹272. Book profits at ₹260.
If the above stop-loss triggers, it would act as an indication of a trend reversal. In that case, buy zinc futures for a target of ₹283. Stop-loss can be ₹268.