Zinc LME Outlook: Consolidation time before resuming the uptrend
11 Sept 2017
In our last report sent in June for the zinc outlook we has shared how zinc has bottomed out between 156-160 and 165 is broken the first target will be 175 followed by 190 and then 200 which we have repeatedly shared with our clients ( new readers may scroll down to read) .It has been a broad based rally in industrial metals which has pushed the zinc prices to the highest levels since 2007.Fundamentally a supply crunch is also contributing to the rise along with china’s decision to review scrap imports and on the other side commitment from Trump that he intends to keep his promised of $ 1 tn infrastructure spending is driving all the industrial metals to multi years high.
Whats Next?
As seen below in the LME chart , a high of 3220 was made last week and immediately in line with the expectation it corrected to trade now at 3056 levels. It can be construed as a correction and profit booking and overall the medium to long term term outlook remains still bullish. In the very near , as seen on the chart 2970-2990 levels market by yellow looks to be a very good support and immediate resistance is seen around 3085-3115 levels where we can expect selling to resume and might target 2970-3000 on the downside before reversal and then continue with the uptrend. We will be carful to see any sign of divergence in the momentum indicators around 3000 levels and on the upside if 3150 breaks then it will probably a confirmation that bottom has been formed at 3027 ( low of last week).Until then we expect market will look to consolidate between 2975-3115 in the near term .Momentum indicators are at neutral zone.
