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The immediate outlook for the silver futures contract traded on the Multi Commodity Exchange (MCX) is not clear. The contract fell towards ₹38,000 a kg in the past week as expected. It has been hovering above this psychological support level over last few trading days. The contract currently trades at ₹38,350. Whether the contract will break below ₹38,000 or move higher from here will decide the next leg of move. Traders can wait on the sidelines at the moment to get a clear trade signal and then take positions accordingly.
If the contract manages to sustain above ₹38,000 and moves further higher , it can test the next resistance at ₹39,200. Only a strong break above this hurdle will ease the downside pressure and turn the outlook bullish. Such a break will open doors for the next targets of ₹40,000 and ₹40,500. Traders can use this break to go long at ₹39,300. Stop-loss can be kept at ₹38,900 for the target of ₹39,900.
On the other hand, the downside pressure will increase if the contract declines and records a strong close below ₹38,000. The next target will be ₹37,000. It will also increase the danger of the contract revisiting ₹36,000 levels in the coming weeks. In this case, traders can go short at ₹37,850 with a stop-loss at ₹38,200 and for the target of ₹37,150.
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