Bearish outlook is intact for MCX silver

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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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