MCX Silver: Bull Trap
CommodityOnline | Jun 25, 2013 06:58AM ET
MCX Silver has been in an downtrend for the past two years, forming lower tops and lower bottoms within the channel (R-S). T After breaching the long term support line (S) at Rs.53533, the price gave a sharp fall and made a two year low of Rs 40749.
Later, the price gave a pullback rally and gave a sharp fall again, creating a new low of Rs 40360. Further price is currently holding below the resistance (S2) of Rs 41280. Hence the pullback rally is a bull trap, and the medium trend continues to look bearish for silver with a test of the previous low of Rs 37990/36000 level looking possible.
The 14-period RSI is sustaining below the resistance line well below the 50 mark, and is currently pointing lower which indicates bearish momentum.
Until price closes above trend line (R2) at Rs.44990, selling on rise is advisable.
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