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The silver futures contract traded on the Multi Commodity Exchange (MCX) has seen a sharp reversal after recording low of ₹37,211 per kg on Friday. This reversal is very significant as it has happened from just above a key channel support level. Since the contract has been falling continuously since July, there is a strong probability of a corrective rally in the coming days.
Immediate support for MCX-silver futures contract is at ₹38,000. While the contract trades above this level, a rise to ₹40,000 is possible in the coming days. Traders with a short-term perspective can go long with a stop-loss at ₹37,850 for the target of ₹39,700.
The downside pressure would increase if the contract declines below ₹38,000 now. Such a fall can take it lower to ₹38,100 which is the channel support level.
As mentioned above, the reversal from Friday’s low of ₹37,211 is very important - from a medium-term perspective. The key resistance to watch now will be ₹40,000. If MCX-silver manages to breach this hurdle decisively in the coming weeks, then it would confirm a trend reversal. In such a scenario MCX-silver will have the potential to target ₹44,000 in the medium-term.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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