It is now trading at US$33.75 an ounce and this is below the support provided by the 100dMA at US$34.12 an ounce. If we could see it closing the current session above the 100dMA, good news for the bulls although it could turn out to be a temporary respite. However, closing lower than the 100dMA, we could see more downside in the next session. Wait and see.
The RSI is bordering on oversold and the MACD, fast approaching zero, shows strong momentum to the downside. In case the 100dMA support fails, what is next? Look at the weekly chart and we get some clues. The 50wMA is at US$26.83 an ounce. Wow! That is some fall from US$50.00 an ounce. Well, if it should happen, yes, it is.
The thing to note is that the 50wMA will move higher in the next week and the value could be somewhat higher, perhaps, closer to US$27.50 an ounce. It is also interesting to note that this price would still be a higher low compared to the low touched in January 2011.
The 50wMA is one which was tested successfully many times in 2010 and, expecting it to be a stronger support, I plan on adding more to my long position in the precious metal closer to that level.
UOB was selling silver at S$43.76 an ounce today.
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