The short-term rally that begun in early June in the silver futures contract traded on the Multi Commodity exchange has taken a pause now.
The contract has been consolidating sideways between ₹44,000/kg and the 200-day moving average, currently at ₹44,868 since June 20. Traders have to wait for the contract to break this range on either side in order to get a clear trade signal.
A strong break and close above the 200-day moving average resistance will aid in extending the current uptrend further. Such a break can take the contract higher to ₹45,600 which is the next resistance.
In such a scenario, short-term traders can initiate fresh long position around ₹44,950. Stop-loss can be placed at ₹44,600 for the target of ₹45,500. On the other hand, the outlook would turn negative for the MCX-silver futures contract if it declines below ₹44,000.
In this case, traders can initiate fresh short-position with a stop-loss at ₹44,200 for the target of ₹43,550. The contract can fall to test the 21-week moving average support at ₹43,450.
On the global front, the silver spot price is hovering just below an important resistance at $21.2/ounce. A strong break above this resistance will be bullish.
It can take the commodity higher to $21.7 and $22 in the short-term. Support for silver is placed at $20.8. Declines below this level can drag it to $20.3/ounce.
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