Silver is rebounding off support.

Today, a fellow local blogger bought some 3,000 ounces of silver at US$36.70 an ounce! Yes, he is a very rich guy and he thought he had missed the silver boat when it hit a high of almost US$50.00 an ounce in the recent past. This is his maiden purchase and I am impressed.

Well, is it a good time to be back in silver? Technically, silver was hugging the 100dMA for a few sessions and formed multiple dojis. The long white candle in the last session which formed above the 100dMA confirmed the reversal signals.

The MACD seems ready to form a bullish crossover in negative territory. Silver has rebounded smartly but as the MACD is in negative territory, it could just be a rebound and nothing more. We want to stay cautious and not throw in the kitchen sink as well if we initiate a long position here. Of course, initiating a long position now is much safer compared to just three or four weeks ago.

Silver is currently at US$37.24 an ounce. I would look to the 50dMA which is at US$38.98 currently as the immediate resistance. If price is unable to move above the 50dMA convincingly, be prepared for more downside. A test of the 200dMA for support would be ideal for long only investors to add to their positions.