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.