The zinc futures contract traded on the Multi Commodity Exchange (MCX) surged 4 per cent on Friday.

This rally has helped the contract to break above its sideways consolidation and also go past a key resistance at ₹195/kg.

The contract made a high of ₹198.6 on Monday and has come off slightly from there. It is currently trading at around ₹197.

The key resistance is in the band between ₹198.5 and ₹199. Inability to break above this resistance zone may trigger a pull-back to ₹190 or ₹188 in the coming days in which case the break above ₹195 will be a false break.

In such a scenario, the MCX zinc futures contract may stay range-bound between ₹185 and ₹199 for some time. A breakout on either side of this range will then decide the next leg of movement.

The price action on the charts over the past few weeks suggests that the contract is not getting strong selling pressure below ₹185.

This signals that the downside in the contract could be limited to ₹185 or ₹184 if the contract declines below ₹195 immediately.

This leaves the possibility of the contract breaking above ₹199 in the coming days. A strong break above ₹199 may boost the bullish momentum.

Such a break can lift it to ₹204 or even ₹208 thereafter.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading.