The candlestick formed is akin to an inverted cross. Price pushed higher only to give back all its gains to close the session unchanged, almost. This tells of great selling pressure closer to US$50.00 an ounce and it is a formidable resistance. From here on, at least in the near future, bulls are likely to proceed with caution and I imagine that some could have been burnt as they chased silver higher.
Looking at the candlesticks, it is clear that US$42.00 is probably a nice enough support and this is followed by US$40.00 an ounce. After that, US$38.00 an ounce. With the 20dMA at about US$40.84 now, buying some at US$42.00 an ounce as a hedge could be a good idea. However, after such a steep run up in price, we could expect an equally steep correction and I would not be surprised if silver should go lower.
With the MACD set to form a higher high, momentum is strong and the chances of price being supported in the event of any retreat are quite high. Silver's uptrend is intact and it would make sense to buy as supports are tested.
2 comments:
Hi AK,
Yes, silver is finally retracing. Let's hope it will retrace down 20-25%. Keeping my finger cross. :)
Hi yslow,
More people are aware of the importance to have part of their wealth kept in the form of precious metals.
In the last few months, the corrections in silver's price had been shallow. So, hedging could be a good idea. ;)
Post a Comment