Bearish outlook is intact for MCX silver

The outlook for the silver futures contract traded on the Multi Commodity Exchange (MCX) remains bearish. The contract fell to test the key support around `35,000/kg levels as expected.
The rebound from the low of `35,147 recorded on Thursday has failed to breach the 21-day moving average resistance which is currently at `36,337. The contract recorded a high of `36,320 on Monday and has reversed lower again. It is currently trading near `35,900. A fall to revisit `35,000 levels looks likely in the coming days.
A further break below `35,000 could add to the downside pressure and drag the contract lower to `34,000 and `33,500 there after. But if the contract manages to sustain above `35,000, a range bound movement between `35,000 and `36,300 can be seen for sometime.
Traders with a short-term perspective can go short. Stop-loss can be placed at `36,350 for the target of `35,100. The downside pressure will ease only if the contract records a strong break and close above the 21-day moving average resistance. Such a break will open doors for a rally to `37,000 and then to `38,000.
On the global front, the spot silver ($15.60/ounce) has been stuck in between $15.5 and $15.85 for about a week. A strong break below $15.50 could increase the downside pressure and drag it lower to $15.25 and $15. Such a break will also increase the danger of the price falling below the psychological level of $15.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
Source: http://www.thehindubusinessline.com

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