Buy MCX Zinc Dec around Rs 112-110; target Rs 123: Angel

Angel Commodities has come out with its special technical report on Zinc. According to the research firm, one can buy MCX Zinc December in the range of Rs 112-110, with a strict stop-loss below Rs 107 for the target of rs 123 levels initially and then Rs 137 levels.

MCX Zinc prices after making a low of 49.85 in the month of December 2009 has seen  a sharp rally towards 123.20 levels. Later prices corrected towards 86.05 levels in the month of October 2011 which is exactly the main trendline support and moved higher towards the trendline at 108.90 levels.

As seen in the continious monthly chart above prices have been moving in the Ascending Triangle pattern with the trendline breakout at 106.50 levels, But prices finally broke out the trendline breakout in the month of November 2012 and closed sharply higher.

Hence as per the  pattern we expect zinc prices now to find very good support at the trend line breakout at 106.50 levels and then move higher towards the expected target price of 137 levels as per the Ascending triangle pattern.Trading consistently below 106.50 levels or closing below 106.50 levels would give correction towards the main support trend line now at 103 levels. Multiple closing below 103 levels would confirm that Ascending Triangle pattern has been negated and therby major correction can be expected initially towards 86 levels and then finally towards 74 levels.

Trading levels: (CMP-112.50)
S1-106.50 R1-123
S2-103 R2-138

Recommended Strategy: Buy MCX Zinc December in the range of 112-110, with strict stop-loss below 107, Targeting 123 levels initially and then 137 levels.

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To read the full report click on the attachment

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