Trading opportunity in Zinc & Lead: SMC Global

Zinc and Lead witnessed steady upside last month amid good demand from China and rise in cancelled warrants in LME and artificial shortage created due to banks financial deals. But beginning of august month proved full of turbulence as the meltdown in the global financial markets took toll on the base metals pack and they also crumbled under pressure. US debt concerns and downgrade of US debt to AA by S&P added more downside pressure on the prices.

In the euro zone, the European Central Bank spent a record 22 billion Euros on government debt last week, reactivating its controversial bond-buying plan to try to halt the spread of the euro zone debt crisis to Spain and Italy.

There are escalating fears over economic and demand growth in the United States and the euro zone, both mired in a debt crisis will also keep the downside pressure intact in Lead and Zinc. Slow pace of automobile sales will also be dampening in demand of battery metal like Lead.

Recommendation: Investors are advised to take Long term fundamental sell position in MCX Lead(Sep) contract in range of 107.20-108.20 for the target of 101 and 99 with stop loss of closing above 112.50.

Recommendation: Investors are advised to take Long term fundamental sell position in MCX Zinc (Sep) contract in range of 98-97.80 for the target of 94 and 92 with stop loss of closing above 100.80.

Shares held by Insurance Companies

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment