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Zinc futures saw a decline in price recently. It slipped below a support last week, which triggered a sell-off.
The February futures on the MCX, the active contract, made a low of ₹256.35 on the special trading session on Saturday. It is currently hovering around ₹260.
Although the drop has been sharp, the long-term chart of zinc futures shows that ₹255-260 is a support zone. This might help with a recovery.
Such an upswing can lift the contract to ₹270, a resistance level. A falling trendline coincides with ₹270, making it a strong barrier. A breakout of ₹270 can take zinc futures to ₹280.
On the other hand, if the contract falls below the support at ₹255, it can extend the downswing to ₹250, a key base.
Broadly, as it stands, zinc futures is hovering near a support, which can help it appreciate up in the coming days.
Trade strategy
Go long on zinc futures at ₹260 and place a stop-loss at ₹250. When the contract rises to ₹270, revise the stop-loss to ₹262. Book profits at ₹280.
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