Zinc prices have been vibrating up and down in a narrow range over the last few days. Multi Commodity Exchange (MCX) zinc futures contracts have been lit in range between 271 pounds and 277 pounds per kg over the past few days. Within this range, contracts are currently trading at £276 per kg.
Outlook
The close outlook is positive. Support is £271 and £269. As long as the contract is trading beyond these support, it is likely to rise to £282 in the coming days.
However, the area, which is around 282 pounds, is a strong resistance. Violating £282 and subsequent reversals allow the MCX zinc futures contract to be reduced to the 270 level again. The new decline, above £269, is bearish for the contract.
In that case, the MCX zinc futures contract will be subject to pressure from a sudden fall. This opens the door to the contract and displays the drawbacks of £255-250.
Meanwhile, if the contract violates £282, it could gain momentum. Such a break can take up to 295-300 zinc futures contracts.
Therefore, the price action around £282 will require close monitoring in the coming days.
Trade Strategy
The future direction of the move depends on what happens around £282, so traders are advised to leave the market for now.
