After hovering in a narrow range for long, the silver futures contract traded on the MCX is signalling a bullish break out now.
The contract which was stuck below its 200-day moving average resistanceat ₹44,709/kg for more than two weeks has broken this resistance decisively on Monday. The 200-day moving average level could now act as a good resistance-turned support level.
As long as the contract trades above this level, there is no immediate downside threat for the contract.
Immediate resistance for the contract is at ₹45,063 – the 55-week moving average. A strong break above this resistance will confirm the bullish breakout. In such a scenario, the contract will have the potential to rise to ₹46,100 in the coming days. Short-term traders can go long at ₹45,100.
Stop-loss can be placed at ₹44,700. Partial profits can be booked at ₹45,600 and then rest of the position can be squared-off at ₹45,900.
Key short-term support for the contract is at ₹44,000. The outlook will turn bearish only if the contract records a strong close below ₹44,000. But at the moment, the price action on the charts suggests that this is unlikely.
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