Breaking News
0

Will The Bullish Case For Silver Continue?

By ESI Analytics LimitedCommoditiesJan 10, 2019 04:27AM ET
www.investing.com/analysis/silver--technical-analysis-200374296
Will The Bullish Case For Silver Continue?
By ESI Analytics Limited   |  Jan 10, 2019 04:27AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 


The bullish outlook, which we laid out for silver in mid-November 2018 appears to be getting confirmed. The support level, which we suggested as a potential stop-loss level held firm. Silver unfolded the strongest rally throughout 2018 shortly after we submitted the last article with our bullish case for silver. Subsequently, the precious metal increased by 12% during an extremely challenging market period. Meanwhile, equities were on track for the worst December since the Great Depression.

A trading approach is involving. It is necessary to reassess a position frequently instead of praising yourself with past successes. In the particular case of silver, it means to acknowledge that the mid-term trend support gets approached at the time of this write-up. That's the light grey trend channel in the chart below. It tracked price action from the 2011 top. In a similar case, also gold approaches its equivalent channel support right now as well.

Silver, 1 Day Chart
Silver, 1 Day Chart

Technically oriented traders most often observe these longer-term trend relationships. This typically creates supply against the shorter term trend and leads to a correction. We have been witnessing some difficulty in gold and silver to rally over the past few days. Despite further rally potential, a more significant correction is likely to set in somewhere around the current levels. The next correction will probably determine whether silver had a cyclical trend change in November 2018 or not. We do not want to see more than 78% retracement of the rally that unfolded from the November lows. Retracements of that magnitude most often turn out to be misleading. They are usually a continuation of the paramount trend instead of a corrective retracement.

From today's perspective, it appears most likely that the pale grey trend channel gets crossed to the upside. In fact, it seems more likely that the darker grey trend is the actual downside cycle. This implies that price action since early 2016 is most likely not any longer part of that downside cycle. It is something different instead. The most likely scenarios at the time of this write-up get tracked by the black and red Elliott wave annotations. Both imply some form of bullish continuation to the upside. The conclusion is that buying the next dip is likely to be profitable from a mid-term trading perspective. Silver has more room to go on the upside. A convincing break of the light grey trend channel implies a target of at least $18.50 for silver.

All in all, silver reached a junction that is likely to cause a retest sooner or later. Technical evidence suggests that a continuation to the upside is most likely. Finally, a retest could provide the next exciting risk/reward set-up for a long silver position.

Do you want to know more about precious metals? Gold is among our main products and discussed regularly. We focus on its cyclical trends and weekly patterns in our premium analysis.

Will The Bullish Case For Silver Continue?
 
Will The Bullish Case For Silver Continue?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: © 2018 Science Investing - All Rights Reserved \\r\\n\\r\\nThe above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
Continue with Google
or
Sign up with Email