A snapshot of daily chart indicates both side moves in the zinc where sometime bulls take the charge but that was limited to 199-200 level on the other side bears take the chart which was limited to 196-195 level. Overall the short term to intermediate term trend is up due to which we have seen unstoppable rally from 167 to 203 level and then a correction/retracement till 183 level which was healthy sign of an uptrend market. The correction was exactly 50% of fibonacci retracement line.
Bulls once again took the charge to mark the new high of the year but unfortunately they could not and second phase was limited to 201 only and bulls lost the grip from the market and slipped to 189 level. After that we are witnessing tug of war between bulls and bears and both side move can be seen on the chart. However near to 199-200 there is a big supply pressure due to which bulls unable to sustain and losing the grip from the market.
From technical prospective we can see a symmetric triangle pattern on the daily technical chart which is indicating that we may see further range bound movement in the zinc, so traders and investors are advised to sit aside and wait for the clear breakout on either side. A valid breakout with high volume on either side will give us new buy/sell signal. Intraday traders may get the benefit of this range bound territory as short the zinc near 199 with the strict stop loss of 201 for the target of 196 and long the zinc near 196-195 with the strict stop loss of 194 for the target of 199 level.
The 201-203 level seems as strong resistance level and stumble block for bulls, if bulls able to break this level with big volume then we may see some buying till 210 and 215 level in near term. On the other side 196-195 level is key support level a valid breakout of this support will open the way towards 190 and 185 level.
Presently bulls are trading and sustaining between major and minor EMA line which is providing the neutral signal for the time being. The MACD indicator is overlapping with each other which is providing neutral signal. RSI is also arriving at neutral zone.
Trade idea:- Daily to weekly bias remains bearish on the zinc and odds are in favor of bears. Traders and investors are advised to go for short the zinc at current levels 197-198 with the tight stop loss of 201 levels for the target of 192 and 188 levels and add further below 195 level. There are high chances that we may see downside breakout of zinc in this week. On contrary if a daily closing above 201 level occurs then traders are advised to square off all the shorts and sit at long side for the target of 210 and 215 with the tight stop loss of 197.