Silver July Futures Contract (COMEX: SIN1)

On June 09, 2021, we recommended a ‘Sell’ rating on Silver July Futures for 1-2 weeks duration from the technical analysis standpoint. However, considering the recent price action, technical indicators, resistance level analysis, and decent returns; we are of the view that it is prudent to book profits at the current levels. Hence, we suggest investors to exit the commodity trade at the current market price of USD 25.59 as on June 21, 2021. The summary of our previous ‘Sell’ rating, 'Exit Price' and price movement since the previous recommendation on Silver July Futures is provided as below:

Price action and technical indicator analysis (on the Weekly chart):

COMEX Silver Futures price moved down by ~8.11 percent from the recommended entry-price and is currently trading at USD 25.59 on June 21, 2021. Price broke out the upward sloping trendline support at USD 27.62 level on June 16, 2021, and post that witnessed a sharp downside movement. Now the prices are hovering near the major support level of USD 25.52. RSI (14-period) is trading near the oversold zone at ~31.07, indicating a possibility of price reversal. However, prices are still sustaining below 21-period and 50-period SMA, acting as the resistance zone for the commodity.

NYMEX Platinum July Futures (NYMEX: PLN1)

On June 16, 2021, we recommended a ‘Sell’ rating on Platinum July Futures for 1-2 weeks duration from the technical analysis standpoint. However, considering the recent price action, technical indicators, resistance level analysis, and double-digit returns; we are of the view that it is prudent to book profits at the current levels. Hence, we suggest investors to exit from the position at the current market price of USD 1022 as on June 21, 2021. The summary of our previous ‘Sell’ rating, ‘Exit Price’ and price movement since the previous recommendation on Platinum July Futures is provided as below:

Price action and technical indicator analysis (on the Weekly chart):

NYMEX Platinum Futures price was fell by ~11.46 percent from the recommended entry-price and currently trading at USD 1022 level on June 21, 2021. Prices witnessed a breakout of the horizontal trendline support at USD 1116.50 level, on June 17, 2021, and after that, it witnessed a massive sell-off. Since the breakout, prices are sustaining below the horizontal trendline.  

RSI (14-period) is trading near an extremely oversold zone at ~22.20, indicating a possibility of sharp recovery in the price. However, prices are still sustaining below 21-period and 50-period SMA, acting as the resistance zone for the commodity in near term.

Conclusion: 

Based on the above-mentioned price action, RSI (14-period), and support level analysis, we recommend investors to exit both the positions and book profit at the CMP as on June 21, 2021 (Chicago, IL, USA 12.45 AM (GMT -5).

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.80:1.00), however, returns are generated within 1-2 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and fundamental performance of the commodities has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, and social and political instability risks etc.

Note: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the commodity. Commodity with high volumes is more liquid compared with lesser ones. Liquidity in commodity helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is June 21, 2021 (Chicago, IL, USA 12.45 AM (GMT -5). The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

USD: United States Dollar

RSI: Relative Strength Index 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any commodity evaluation. The above are illustrative analytical factors used for evaluating the commodity; other parameters can be looked at along with additional risks per se. Investors can consider exiting from the stock if the Target Price mentioned as per the technical analysis has been achieved and subject to the factors discussed above.