Tuesday 9 October 2012

Lead Zinc Spread Trading


CHART OF LEADMINI FRO SEPTEMBER TILL DATE
The chart above describes the direction in which the Leadmini is moving. It is currently trading below the 15 days moving average. Although it is still above the 50 days moving average, it could soon test that level. Almost major indicators have generated a sell call and this counter is likely to see further low prices. Therefore trading long in Leadmini should be avoided.

CHART OF ZINCMINI FRO SEPTEMBER TILL DATE
The Zincmini chart described above does not differ much from the Leadmini. As we know these two meals do move in tandem the major point ot note is the Zincmini has come below the 50 days moving. This indicates its weakness. This metal too will lose more value as we understand from the chart. So shorting this metal is the appropriate strategy.

The spread gap is now at 12 although we could have entered a Bear spread it much better to look for a Bull spread opportunity, because it will likely to give more profits. Let us wait patiently till we find such opportunity. Even at this point it is possible to enter a Bear spread, because the current trend is unlikely to reverse abruptly. We may book small profits.

Happy trading !!

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