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The silver futures contract traded on the Multi Commodity Exchange (MCX) witnessed a corrective rally in the past week in line with our expectation.
The contract is testing its 21-week moving average resistance, currently at ₹42,760/kg. The contract has reversed lower after testing this resistance and recording a high of ₹42,930 on Thursday.
On the global front as well, the spot silver price ($19.24) has come down in the past week after recording a high of $19.89 on Thursday.
The outlook is bearish and the price can fall to $19 and $18.7 in the coming week. This leaves a bearish outlook for the MCX-silver futures contract . The probability is high for the contract to extend its fall in the coming week to ₹41,150 and ₹41,000 which are the next significant supports for the contract. Also there is a danger of the fall extending further to ₹40,000 in the coming weeks.
Having said this, traders with a short-term perspective can initiate fresh short-position at current levels. Stop-loss can be placed at ₹43,100 for the target of ₹40,250. Resistances for the contract are at ₹42,500 and then at ₹42,760 and ₹42,880.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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