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Buy MCX SILVER MINI NOV FUT at cmp 42700 keeping stop-loss 38200

Way2wealth | 01 Nov, 2016  | Follow Author | Add to my Favourites 
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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.

Investment Strategy: 

  • Buy MCX SILVER MINI NOV FUT at Cmp 42700, TGT 50400, SL 38200.
  • Return to risk ratio: 1:1.7

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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