The silver futures contract traded on the Multi Commodity Exchange (MCX) is not gaining momentum to decisively breach the psychological ₹37,000/kg mark. The contract has come-off sharply after recording a high of ₹37,481 on Thursday.
It is now currently trading near ₹36,350 and is threatening to break below the crucial support level of ₹36,000.
With an immediate resistance is at ₹36,700, the price action on the daily chart suggest that a break and fall below ₹36,000 is more likely. Such a break can take the contract lower to ₹35,600 immediately. It will also keep the contract under pressure for a fall to ₹35,000 there after.
Traders with a high risk appetite can initiate short position at current levels. Stop-loss can be placed at ₹36,850 for the target of ₹35,600. Traders with low risk appetite capacity can wait on the sidelines now and take short position after the contract confirms the break below ₹36,000.
This bearish outlook will get negated if the contract manages to reverse higher from ₹36,000. In such a scenario ₹37,000 and ₹37,500 levels can be revisited. The outlook will turn bullish only if the contract records a strong break and close above ₹37,500.
On the global front, the spot silver ($15.95/ounce) price is facing a strong resistance at $16.25. A decisive daily close below $16 could be bearish. In such a scenario, the spot price can fall to $15.4 and $15.3 immediately and then even to $15 there after in the coming days.
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