It’s not in the least bit surprising that open interest is at a new record high for Shanghai zinc futures. It underpins the serious intent of manufacturers using this base metal. Volume has been strong for the best part of a year as prices rallied from 2015’s multi-year low, retracing just over half the losses from the high in 2009. Weekly closes in the first fortnight of this month above horizontal resistance at 17,330 yuan per tonne are another small positive sign. For confirmation of a very important break higher, we shall watch for a monthly close above here by the close of business on August 31. Chart levels to aim at are: 18,145 yuan, 18,800 yuan and probably 19,000 yuan.
Nicole Elliott is a technical analyst