MCX Zinc had done a tremendous run so far in 2016. Bottomed out on 12th Jan 2016 and till to date moved from 96.65 to 153.35. i.e almost 58.66% gain over a span of 8 months. It is also nearing the long term reference zone 154.35 (May 2015). Till to date MCX Zinc had made 8 month of consecutive higher high and higher low.
It is almost a “V”-Shaped recovery from the May 2015 crash in Zinc Futures. Post the mid of July 2016, momentum in zinc had came down drastically. When the momentum declines buyers started getting frustrated with their long holdings. And when market conditions are not favoring those buyers naturally they turn to sell their contracts and there by triggering shorter term selling.
The shorter term outlook is bearish and expected to trade in the range of 145-154 zone. Short only trend following is a preferred trading strategy to trade Zinc futures.