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Zinc prices have come down over the last one week. The Zinc Futures contract traded on the Multi Commodity Exchange (MCX) made a high of ₹233.85 per kg last week and declined over 4 per cent since then. It is currently trading at ₹224 per kg.
The near-term outlook is negative. Immediate support is ₹222.50 which is holding well for now. If the Zinc contract manages to rise from the current levels, a corrective up move to ₹227 is a possibility. The region between ₹227 and ₹228 is a strong resistance now which can cap the upside. So, the contract could decline and break below ₹222.50. Such a break can take the contract down to ₹219-218 in the coming week.
From a medium-term perspective, the region around ₹218 is a very strong trend support that can halt the current fall. As such, the MCX Zinc Futures contract can see a fresh rise from around ₹218 again, opening the possibilities for the contract to reach ₹230 and ₹235 over the medium-term.
So, the preferred path of move for Zinc going forward would be to see further fall to ₹218. This fall can happen either from the current levels or after a short-lived bounce to ₹227-228. Thereafter, from around ₹218, a fresh leg of rise can target ₹230-235 on the upside.
Traders can wait for dips. Go long at ₹220 and ₹218. Keep the stop-loss at ₹215. Trail the stop-loss up to ₹222 as soon as the contract moves up to ₹224. Move the stop-loss further up to ₹225 when the contract touches ₹227. Exit the long positions at ₹228.