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The short-term outlook for the silver futures traded on the Multi Commodity Exchange (MCX) has turned bearish.
The strong rally that began from the January 2 low of ₹35,698 a kg failed to breach the psychological ₹40,000-mark decisively. The contract moved past its 200-day moving average at ₹40,306, on Thursday and Friday, but failed to sustain the momentum and reversed lower. The contract is currently trading near ₹39,200.
On the global front, spot silver ($17.9/ounce) has reversed lower after failing to breach its 200-day moving average resistance at $18.37. Immediate resistance is at $18. There is a possibility of a fall to $17 in the coming week.
The outlook for the global spot silver price will turn bullish on a strong break and close above $18.5.Subsequent targets on such a break will be $19 and $19.5.
MCX silver futures, which move in tandem with the global spot price, are also expected remain under pressure. The contract is likely to fall to ₹38,000 in the coming days.
Traders with a short-term perspective can go short. Stop-loss can be kept at ₹39,800 for the target of ₹38,300.
MCX silver futures will gain bullish momentum only if they record a strong close above ₹40,000.
Such a break can take the contract higher to the next target of ₹41,500.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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