The silver futures contract traded on the Multi Commodity Exchange (MCX) has been stuck within a sideways range of ₹36,000 and ₹37,000 per kg for more than a week. The contract tested the lower end of this range on Monday and is reversing higher from the low of ₹36,074. It is currently poised at ₹36,300. There is a strong possibility for the contract to rise to ₹37,000 – the upper end of the range in the coming days. A break out on either side of the ₹36,000-37,000 range will determine the next leg of move for the contract.

However, the charts suggest that the contract is less likely to move past ₹37,000. A fall below ₹36,000 can drag the contract lower to ₹35,000. Traders can initiate fresh short positions at current levels. Stop-loss can be placed at ₹37,250 for the target of ₹35,100. Intermediate rallies to ₹37,000 can be used to accumulate short positions.

The negative view will reverse only if the contract records a strong break above ₹37,000. The ensuing targets on such a break will be ₹37,300 and ₹37,500.

The outlook is negative on the global front too. The spot silver price ($16.2/oz) is facing resistance at $16.6. It can fall below $16 to $15.5 in the coming days. A fall in the global price can drag the price of domestic futures contract lower as well.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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