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The silver futures contract traded on the Multi Commodity Exchange (MCX) has been stuck between ₹41,000 and ₹42,800 per kg for more than two weeks now. It is currently trading around ₹42,300.
The near-term view is unclear. Only a breakout on either side of ₹41,000 or ₹42,800 will give a clear indication on the next direction.
The bias is bullish on the charts. A decisive daily close above ₹42,600 may be an initial sign of the contract breaking above ₹42,800.
A strong break above ₹42,800 will open the doors for a fresh rally to ₹43,500 and ₹44,000 thereafter.
Traders with a short-term perspective can go long on a decisive break above ₹42,600. Stop-loss can be placed at ₹42,100 for the target of ₹43,700.
The 200-day moving average is around ₹41,100 and then a key psychological support is at ₹41,000.
The contract will come under renewed pressure only if it declines below ₹41,000. Such a break can drag it to ₹40,000 or even lower.
On the global front, the spot silver price is stuck between $17 and $18 per ounce. It is currently trading around $17.7 per ounce.
A break out on either side of $17-$18 will decide the next trend.
A strong break above $18 can take the silver price higher to $18.7 and $19.
On the other hand, if silver prices decline below $17, it can fall to $16 thereafter.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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