Commodities

MCX-silver in danger of a fall

Gurumurthy K BL Research Bureau | Updated on July 29, 2014 Published on July 29, 2014




The silver futures contract traded on the Multi Commodity Exchange (MCX) is struggling to breach the psychological level of ₹45,000/10 gm for more than two weeks. The picture is turning bearish for the contract now.

Although the contract has reversed higher after recording a low of ₹43,728 on Thursday, it has a significant resistance ahead. The 21-day moving average at ₹44,800 will be a key resistance to watch now. If the contract fails to breach this level and reverses lower from here, then it will provide a good opportunity for both the short- and medium-term traders to sell this contract.

Short position can be initiated at ₹44,700 with a stop-loss at ₹45,100 for the target of ₹43,900.

Traders with medium-term perspective can continue to hold their short position. The MCX-silver futures contract is trading in a bear channel. As long as it trades below ₹45,000, there is a danger of a fall to ₹42,500 and even ₹40,000 over the medium-term. Supports for the contract are at ₹43,700 and ₹43,100. A strong break below these supports will result in a decline to the above mentioned levels of ₹42,500 and ₹40,000. So medium-term traders can hold the short position for a wider target of ₹42,500.

The outlook for MCX-silver will turn bullish only if the contract records a strong break closes above ₹45,000. The ensuing targets on such a break will ₹46,500 and ₹48,000.



Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on July 29, 2014
This article is closed for comments.
Please Email the Editor