Silver closed above support.

Silver, in the last session, closed above the 20wMA.  A long legged black spinning top was formed. A spinning top suggests indecision and fierce fighting between the bulls and bears. It is also a reversal signal but it might be less convincing as it is not white in color which suggests that the bears had a slight advantage.  The lower wick also broke support just as it did last week but it touched a lower low this week. There is little doubt that the 20wMA has weakened. We could see the 50wMA tested eventually. That is currently at US$27.18 an ounce.

What about the daily chart? The good news is that the RSI has formed a higher low while price formed a lower low. This is a positive divergence. The downward momentum in price has eased and could lead to a reprieve. It does not mean that price would rebound immediately as positive divergences could fail too or take some time to come to fruition.

With the MACD still declining in negative territory, the momentum is clearly to the downside. Any long position taken at this point in time should be a smallish hedge. Being mentally prepared that price could see more downside is also a must although any downside is definitely more limited at this time compared to a fortnight ago.