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The silver futures contract traded on the Multi Commodity Exchange (MCX) slumped 2.6 per cent on Monday to ₹33,451 per kg, after having closed on a positive note in the past week. But, it has bounced up on Tuesday gaining over ₹200 or 0.6 per cent and currently trades at ₹33,660. This bounce appears to be a corrective move. Both the medium and short-term trends are down for the contract.
It trades well below its 21- and 50-day moving averages. An emphatic fall below the immediate support level of ₹33,200 can drag the contract down to ₹33,000 and then to ₹32,600 in the short term. Traders with a short-term view can go short below ₹33,200 with a stop-loss at ₹33,500. On the other hand, the contract has a key resistance at ₹34,500 and ₹35,000. Strong rally above these resistance levels is needed to alter the short-term downtrend and take the contract higher to ₹36,000.
On the global front, the spot silver price fell 3 per cent on Monday, breaching its 21-day moving average. It currently trades at $13.9 per ounce. An immediate support is at $13.7. Conclusive fall below this support will strengthen the downtrend and drag the silver price down to $13.5 and then to $13 in the medium term. Key resistances are placed in the $14.4-$14.5 range and at $14.8.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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