After the sharp fall from the highs of Rs 110.90 levels the price of Zinc has pulled back over the past few sessions of trade.
But, some of the recent developments on the charts suggest that the pullback has been completed and the price is now set for a correction over the upcoming sessions of trade.
The first and the foremost bearish signal is the formation of a 3-bar bearish reversal pattern on the daily charts at the 61.8% Fibonacci retracement level as shown in the chart above.
Secondly the recent retracement from the lower levels was on the back of extremely poor volumes which is a clear sign that there wasn’t any real buying interest in the counter.
Finally, the recent swing high was also met by a classic negative divergence on the RSI indicator.
Thus, considering the technical factors mentioned above we expect the price of zinc to correct towards levels of Rs 100.25 / 99 over the upcoming 3-4 sessions of trade.
We recommend traders to sell 50% between Rs 102.10--Rs 102.90 levels and again on rallies to Rs 103.75--Rs 104 levels with a stop loss placed above Rs 104.80 levels for downside targets of
mentioned above.
MCX ZINC SEP. CONTRACT OPEN Rs 104.45 HIGH Rs 104.45 LOW Rs 102.10 CLOSE Rs 102.40
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