Technical Outlook & Trading Strategy:-
The price of Zinc came under some supply pressure and hit a low of RS 102.25 on 11th July, 2011from the highs of RS 107 levels as on 05th July, 2011.
We would like to point out that the RS 102.50 to Rs 101 levels are strong support zone for this base metal.
Yesterday’s smart rebound from these support levels has led to the formation of two bar
bullish reversal pattern on the daily charts,suggesting that the bottom is in place over the near term to short term.
The RSI indicator has also come out of the oversold territory backed by a positive divergence.
We recommend traders to buy 50% at current levels and add to long positions on dips to RS 103.80 — Rs 103.40 levels with a stop loss of RS 102.40 levels for upside targets of Rs 106 / RS 106.75 levels.
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