Go long on zinc futures at ₹278 and ₹273

Zinc futures hit a ten-week high of ₹282/kg on March 14. But then, they moderated after that and closed at ₹277.65 on Tuesday.

Nevertheless, the contract surpassing the resistance at ₹275 last week is a positive sign. So, although there is a possibility for zinc futures to soften to the ₹272-275 price band, we expect them to eventually resume the rally.

Zinc futures are likely to surpass the hurdle at ₹282 and rally to ₹293 in the short-term. A breakout of ₹293 can lift the contract to ₹300.

On the other hand, if zinc futures decline from the current level and slip below the support at ₹272, the outlook can turn weak. Notable support below ₹272 can be spotted at ₹266 and ₹260. 

But as it stands, the inclination is bullish, and traders can consider longs.

Trade strategy

We recommend going long on zinc futures at ₹278 and ₹273. Place initial stop-loss at ₹268. When the contract rises past ₹282, revise the stop-loss to ₹276. Tighten the stop-loss to ₹282 when the price hits ₹288. Book profits at ₹293.