Saturday, 23 July 2011

Silver: Strong resistance.

The last five sessions saw silver's price forming five candlesticks which clustered in a narrow range in the region of US$40 an ounce. It seems to have come up against a formidable resistance. Tension is building up.

With the RSI having formed a higher low, momentum remains strong. The MACD is still rising in positive territory. However, things could change quickly if USA's government should raise the country's debt ceiling. So, I would not add to my long position at these levels.

Any pull back to supports could see stronger buying interest. Immediate support is provided by the rising 100dMA which is approximating US$38 an ounce. This is followed by the rising 50dMA which is approximating US$36 an ounce. These would be more ideal prices to add to long positions.

Where do we find resistance in case price rose higher? After all, the RSI has yet to move into overbought territory. For silver, it seems that there is resistance at every US$2 interval. So, the next resistance level is at US$42 an ounce followed by US$44, US$46, US$48 and US$50 an ounce.

I would accumulate if supports were to be tested. If price continues to rise without a test of the supports identified, I would ready myself for further divestment of my long position.

Saturday, 16 July 2011

Silver: Going higher?

Three sessions ago, silver broke out of resistance provided by the declining 50dMA. This was done convincingly, forming a long white candle in the process. The question is whether it could go higher or whether it would retreat?

Prices climb a wall of worries and I would not be surprised if the price of silver should retreat to test supports before moving higher. For now, the momentum oscillator shows strength. The RSI bounced off the 50% line which acted as support. The RSI, still rising, is now approaching the overbought region. The MACD has crossed into positive territory and is still rising. Momentum is positive.

These are signs that market bulls need to confidently add to their positions. They could buy in if price should pull back to support next. Immediate support is in the region of US$38 an ounce while stronger support is found at US$36 an ounce which is where we find the former resistance provided by the 50dMA.

Bears would be watching the region of US$40 an ounce closely. If price is unable to go higher than US$40 an ounce over a prolonged period, we could see another round of selling. Breaking US$40 an ounce would be great news for bulls.

Sunday, 10 July 2011

Silver: Stronger momentum.

The price of silver has strengthened somewhat, closing at US$36.54 an ounce in the last session. How it performs in the next session is crucial in determining its direction in the near future. How so?

US$36.54 is where we find the 50dMA which has turned down and is declining. This MA is likely to exert some downward pressure on price.

Momentum has strengthened as the RSI broke 50% which often acts as resistance or support. The MACD although still in negative territory has also turned up and is rising towards zero.

Failure to overcome resistance and in moving higher could see the 200dMA tested as support in time. This is currently at US$32.01 an ounce.

Saturday, 2 July 2011

Silver: Blog post in ASSI.

I am trying to adjust to a new routine in life and have been waking up two hours earlier everyday for a week now. Trouble is I am still having difficulty sleeping earlier at night and I am suffering from lack of sleep.

I have a new blog post on silver today but posted it in my other blog, ASSI, by mistake. So, go ahead and check ASSI for my latest thoughts on silver.