Zinc futures has been appreciating over the past month. The price action indicates that the rally retains the strength and so, the probability of further rally is high.

The December expiry zinc futures on the Multi Commodity Exchange (MCX) bounced off the support at ₹270 by mid-November. Early this week, the contract rose above a key level at ₹290.

As it stands, the uptrend seems steady, and the contract is likely to hit ₹315. A breakout of ₹315 can open the door for a rally to ₹340.

On the other hand, if the contract declines from the current level, it can find support at ₹285. Subsequent support is at ₹270. A breach of ₹270 can turn the outlook bearish in which case zinc futures can drop to ₹252.

But given the prevailing conditions, the chances for a rally to ₹315 are high.

Trade strategy

Last week, we suggested going long at ₹289. Retain this trade. Traders can add longs in case the price dips to ₹284. Maintain stop-loss at ₹278.

When the contract touches ₹300, revise the stop-loss to ₹292. On a rally to ₹308, move the stop-loss further up to ₹300. Exit at ₹315.