Introduction: Silver’s Sharp Rally and What Comes Next
In our Samshot note dated October 9, we cautioned investors that Silver was entering overheated territory. The euphoric rise among retail participants was a clear signal that prices were due for a short-term top.
Fast forward to today, the latest Silver Futures (MCX) chart has validated that view. Silver prices have now entered a healthy correction phase after a stunning rally from ₹1,10,000 to ₹1,70,000 per kg.
Head and Shoulders: A Classic Reversal Pattern Appears
Silver has formed a textbook Head and Shoulders pattern, a well-known bearish reversal formation that typically signals trend exhaustion following a sharp uptrend.
Prices have broken below the neckline, with the current levels near ₹1,40,000 per kg, aligning almost perfectly with the 50% Fibonacci retracement of the previous bullish rally.
This breakdown confirms that the short-term momentum has weakened, while a technical pullback zone is now developing.
Key Support Levels to Watch
The immediate support zone between ₹1,38,000–₹1,40,000 is crucial. A temporary bounce could occur from this range as buyers look to defend this level.
However, if this support is breached decisively, Silver may extend its decline toward ₹1,33,000 per kg, coinciding with the 61.8% Fibonacci retracement, a historically strong level for renewed buying interest.
Support Level | Significance |
₹1,38,000–₹1,40,000 | Short-term support zone |
₹1,33,000 | 61.8% Fibonacci retracement |
₹1,23,000 | Deeper retracement & strong demand zone |
Healthy Correction in a Bull Market
Despite the short-term weakness, the correction should be viewed as healthy and constructive. Every bull market needs periodic pauses to consolidate gains and shake off speculative excesses.
The froth and euphoria that dominated earlier are now being washed out, helping Silver reset for a sustainable long-term uptrend.
Once sentiment stabilizes and technical supports hold firm, Silver could prepare for the next leg higher, continuing its long-term bullish trajectory.
Outlook: Long-Term Bullish, Short-Term Caution
Our stance remains clear:
- Long-term view: Bullish on precious metals, including Silver.
- Short-term view: Caution warranted until key supports confirm stability.
Investors are advised to track the ₹1,38,000–₹1,33,000 zone closely for signs of price stabilization or buying reversal patterns before making new entries.
Final Thoughts
Silver’s current correction phase is a natural pause in a much larger uptrend. While short-term traders should stay alert, long-term investors can use these dips as opportunities to accumulate gradually once price action confirms support.
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