Silver: Watch the 50dMA.

Some of you might have bought into silver as its price tested the support provided by the 100dMA which is currently at US$34.36 an ounce. With silver now at US$38.82 an ounce, that means a nice 13% gain in just three days.

The 50dMA which seems to be going flatter is at US$39.07 an ounce. Silver traded at close to US$39.50 an ounce just a few hours ago before pulling back. It seems to me that the resistance provided by the 50dMA could be quite strong. I would keep an eye on this. If price were to break out, the next resistance is provided by a 20dMA which has turned down and is currently at US$ 42.62 an ounce. Consider taking some profit.

If, however, silver's price failed to move higher and if price were to close below US$38.00 an ounce, we could see it declining further. A retest of the rising 100dMA is possible and it would, in the process, erase all paper gains for anyone brave and lucky enough to initiate a long position three sessions ago. A little less greed could be a good thing.