GSCI Zinc Index: Major levels reached


12 JUL 2018

The major reversal pattern as mentioned mid-June (see our outlook of 19 June for details) has panned out well. The price projection of 208.10 as well as the major pivots of 2016-2017 at 199 have been hit. Some cooling, consolidation and choppy recovery is expected before the primary down trend heads lower again.

A recovery could bring prices back to 214, 225 without altering the long-term negative outlook. Counter trend rally, nothing more is expected at this point. Often such bounces are difficult to trade and could take a few months to fully pan out. Covering some shorts (30% or so) and re-entering only after a bounce has occurred is probably the best strategy to follow. Holding shorts with stops above 235 is also justifiable if you are willing to accept such draw down risks.

There is of course always a chance that a recovery does not take place and prices head directly to the secondary targets of 183.30 and even 139.75. Whatever the case, it is absolutely not a buyers market.

  • Primary trend: negative
  • Outlook: mid-stage down trend, negative
  • Strategy: hold-short / sell rallies
  • Support: 199 / 183.30* / 139.75*
  • Resistance: 214 / 225 / 235.20+
  • Outlook cancelled/neutralized: above 235.20

Weekly chart S&P GSCI Zinc Index