Zinc: Pause In A Bull Trend Or Reversal?
Shiv Kumar | Dec 05, 2016 03:17AM ET
Here is the weekly chart for zinc. A dark cloud cover has formed on the weekly chart, which often indicates a reversal if it forms on a multiweek top or bottom. But MACD stil not confirming the move south, whereas RSI on the weekly chart is hinting a move south as it exited the overbought region.
Now, after a test of the 72-75 region again, it might reverse. If this becomes a reality, then the 2900-3000 region on price scale will serve as a ceiling for zinc prices. Personally, I think that zinc should hit another high above 3000, but this is the market and it doesn't care what we think, so it is better to stick with the technical picture, which is looking slightly in corrective mode now.
Let's take another look from smaller time frame. Here is the daily chart of zinc. The daily chart is giving a clearer picture, with both indicators showing a move south in the coming days. We should be ready for a correction in the near future after testing a resistance region of 2780, followed by 2900. If zinc fails to hit the restance area, then any type of further panic selling pressure should emerge only below the daily trend line since Oct 21st, 2016, or simply below 2650.
Take another look with 2 hour chart to look for the possibility of a tradable bounce and a good selling point
Short term traders have strict stops above 2780 for short. Any bounce above will take it up to 2850/2890. Try short there with strict sl above 3000 for a possible healthy correction up to 2500 levels.
Resistance: 2780 / 2908 / 2985
Support: 2650 / 2570 / 2500
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