Zinc August contract inched 2.90 rupees down to settle at 140.30 this week. A bearish divergence is clearly visible on weekly chart of zinc and prices have also reversed with bearish candlestick formations. 10 weeks SMA has been staying above 20 weeks SMA and 20 weeks SMA is also above 50 weeks SMA keeps short term and long term trend in bullish territory. MACD has been staying above line zero with a bullish cross above signal line keeps bullishness intact in this counter. Stochastic is witnessing a nice bearish divergence and responsible for a price reversal. This week Key support for zinc remains at 140 any failure below this level would bring a retest to 136 and then 133 zones. Resistance is now placed near 147 any sustained move above that level may bring some charm back and then commodity will try moving towards 150-153 zones. It has finished its 1st phase of bullishness and we are expecting a correction in this metal in coming days.
Trading range for the week is expected among the key support at 140 and resistance at 147.
Â· Selling zinc around 143.50-144 with stop loss above 147 for targeting 140.50-138 and more down side might be appropriate.
Â· In alternative scenario buying above 147 with stop loss below 144 for targeting 147-149-150 and more upside might be appropriate.
Â· In another possible scenario selling can be taken below 140 with stop loss above 142 for targeting 137-135 and more down side.
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