The zinc futures contract on the Multi Commodity Exchange of India (MCX) retains its ₹190-₹205 per kg sideways range. The contract has been stuck in this range for more than three weeks. Within this range the contract hit a low of ₹191.8 on October 16. Since then it has risen over 4 per cent and currently trades at ₹200 per kg.
The bias on the chart is bullish. The price action since the beginning of this month suggests that the current sideways move is a consolidation within the overall uptrend. It leaves high possibility of the contract resuming the uptrend in the coming days. A strong break and a decisive close above ₹203 will mark the beginning of a fresh leg of upmove. This will increase the possibility of the contract breaking the range above ₹205. Such a break will increase the bullish momentum and will trigger a fresh rally to ₹213 and ₹217.
The region between ₹190 and ₹188 is a key support for the contract. The outlook will turn negative only if the contract declines decisively below ₹188. Such a break can drag the contract to ₹185 and ₹183. However, such a strong fall looks less probable at the moment.
Traders with a medium-term perspective can go long at current levels and also accumulate on dips at ₹197 and ₹194. Stop-loss can be placed at ₹191 for the target of ₹215. Revise the stop-loss higher to ₹205 as soon as the contract moves up to ₹208.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.