Looking at the weekly chart, Silver Mini Nov contract has seen a sharp rally from the bottom of around 38286 and extend till 48934. In the process, it managed to confirmed breakout from Downward sloping Trend line joining from top of 70821 on close only chart. However, the followup buying was completely missing as a result we witnessed sideways activity during July and the mid-part of September. Post the consolidation; we witnessed a sharp slide which was slightly unexpected to us. The fall got stabilized near 41840 (close only chart) which coincided with the daily 200-SMA & weekly 45-EMA. Also, if we look at the line chart, Silver Micro precisely hold the support of Rising Trend line joining from the bottom of its all-time low of 33352. The previous top of 41732 which acted as a strong resistance and post the breakout in early July, it reversed its role and became an immediate support (change of polarity rule). Considering the weekly RSI (14) momentum indicator, we are seeing a formation of ‘Positive Reversal’ (please find the exhibit). The said pattern will be activated once Silver Mini Nov future crosses last week high of 42640. Considering the above technical parameters, we expect the primary trend of Silver to resume thus we advised traders to build long position in Silver Mini November contract at current level of 42700, with a price target of 50400. Strict stop loss should be placed at 38200.
- Buy MCX SILVER MINI NOV FUT at Cmp 42700, TGT 50400, SL 38200.
- Return to risk ratio: 1:1.7
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