Zinc futures have extended their decline through the week, with the July contract on the Multi Commodity Exchange (MCX) breaching a critical support level, according to Akhil Nallamuthu of BL Research Bureau in The Hindu BusinessLine. The June contract is trading at ₹356 per kg while the July futures have slipped to ₹353, reflecting a bearish contango structure. With the June contract set to expire on June 30, the analysis focuses on the July delivery for trading decisions.
Price Action and Technical Breakdown
The July zinc futures had been consolidating in a sideways range, with the ₹370 level acting as a strong resistance for over a month. As the bulls failed to push prices higher, momentum shifted in favour of bears. On Wednesday, the contract decisively breached the support at ₹355 and also slipped below the 50-day moving average, a key technical indicator, according to Nallamuthu. The price action suggests that the earlier sideways movement exhausted bullish energy, leading to an acceleration of selling pressure.
Trade Recommendation
Traders are advised to sell July zinc futures at ₹357 with a stop-loss at ₹363. The strategy includes revising the stop-loss down to ₹350 once the price falls to ₹345. Profit booking is recommended at ₹340. Nallamuthu notes that a minor pullback toward the ₹358–₹360 region is possible, but the overall trend remains bearish, and such a bounce should be viewed as a selling opportunity.
| Parameter | Value |
|---|---|
| Instrument | MCX Zinc Futures (July) |
| Entry Level | ₹357 per kg |
| Stop-Loss | ₹363 (initial); revised to ₹350 when price reaches ₹345 |
| Profit Target | ₹340 |
Key Levels to Watch
If the July contract breaks above ₹360, the near-term bearish view would be invalidated, and prices could rally back to the ₹370–₹374 band, which had previously capped upside. However, the immediate expectation is for the decline to resume and touch ₹340 in the near term. The ₹355 level now acts as resistance, and any failure to reclaim it would confirm sustained weakness.
Outlook
The technical setup points to continued downside pressure on zinc futures, driven by the breakdown below both support and the 50-day moving average. Traders with a short-term horizon can capitalize on the bearish momentum using the recommended strategy, while remaining alert to a potential reversal if prices recover above ₹360.
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