The silver futures contract traded on the Multi Commodity Exchange (MCX) breached a key resistance at ₹40,000 in the previous week, after testing it for five trading sessions.

The contract rose 4 per cent to close at ₹41,566 per kg last week. With this up move, the contract appears to have resumed its medium-term uptrend in place since December 2015. Short-term trend is also up for the contract.

It now trades well above the 50- and 200-day moving averages. Facing a key resistance ahead at ₹42,000, the contract started to decline on Monday. It is hovering at ₹41,200.

The short-term uptrend will be intact as long as the contract trades above ₹38,650. Indicators and oscillators in the daily chart are featuring in the positive territory. Traders with a short-term perspective can consider buying the contract in declines with a stop-loss at ₹39,700.

Resumption of the uptrend and a strong breach of the key resistance at ₹42,000 can take the contract northwards to ₹43,000 in the short term. Key supports are at ₹40,000 and ₹38,650. The contract has a strong medium-term support in the band between ₹37,000 and ₹37,750.

On the global front, the silver spot price surged almost 5 per cent to close at $17.82 per ounce last week . However, spot silver has encountered a key resistance at $18 .

Strong breach of this level can take the price higher to $18.5 in the near future. Key supports to note are at $ 17, $16.8 and $16.2.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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