As we had mentioned in our previous few notes, the price of silver have been trading in a well
defined rising channel since 05th Jul, 2011.
The first bearish sign was when the rally that had began from the lows of Rs 58882 levels as on 25th Aug, 2011 couldn’t cross the resistance placed between the Rs 66650—Rs 66890 zones.
The second and the most important bearish event played out during the previous session of trade as the selling pressure dragged the price of silver below its key ascending trendline support on a closing basis.
This ascending trendline had been providing strong support for the prices on every pullback.
The MACD indicator is also trading in sell mode.
We believe that sustenance below the trendline for the upcoming few sessions can lead to severe
corrections in the price of silver and open up downside targets of Rs 61250 and/or Rs 59000.
We recommend traders to sell 50% on rise between Rs 63790--Rs 64000 levels and 50% again
between Rs 64275--Rs 64350 with a stop loss placed above Rs 64727 levels for downside targets
mentioned above.
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