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The silver futures contract traded on the Multi Commodity Exchange (MCX) continues its downtrend. The contract fell sharply on Friday, ending the week 4 per cent down.
A steep fall in global silver price, pulled prices down in the domestic market. The global spot silver ($17.9 per ounce) fell from a high of $18.59 recorded on Friday, to a low of $17.34 on Monday. Key resistances at $18 and $18.3 can restrict reversal from Monday’s low of $17.34. A breach of $18.3 looks less likely and the global spot price can fall to $16.7
On the domestic front, the MCX-silver futures contract is reversing higher from Monday’slow of ₹39,573 per kg and is currently trading near ₹39,750 levels.
However, the outlook for the contract is bearish, and the recent up move could well be a corrective rally within the broader downtrend. Immediate resistance is at ₹40,000 which can limit the rally in the contract. A reversal from this level can take the contract lower to ₹39,000 in the coming week. A break below ₹39,000 can take it down to ₹38,000.
Traders with a short-term perspective can take short positions with a stop-loss at ₹40,150 for the target of ₹39,150.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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