Potential signal:
- I am buying silver if it reaches $42.60, with a stop loss at $42, and a target of $44.60 level.
Silver has gone back and forth during the trading session here on Thursday in the early hours as we continue to see a lot of consolidation and absorption of the bullish pressure. After all, we had shot straight up in the air and now we are just basically going sideways and doing nothing. If that is going to be the case, then I think eventually what we’re doing is killing time before we can make our next move.
If we were to pull back, I think the $40 level is a very strong candidate for significant support. After all, it’s an area that is a large round psychologically significant figure. And it’s an area that I think a lot of people will be paying close attention to in the sense that there’s probably a lot of options barriers there. The previous resistance should now offer support. And of course, we have the trend line and the 50 day EMA racing towards that area. If you extrapolate out from a time basis, the market could be forming a bit of a bullish flag. We’ll just have to wait and see. But the one thing that I do see more than anything else is that we are in an uptrend. So, we don’t want to short silver. I think it given enough time.
Silver Should Go Higher Eventually
We will be looking at this through the prism of a market that ultimately, I think, goes looking to the $45 level, which might take some time to get there. We have spent the last four or five days just simply grinding away some of this excess momentum, which is exactly what you want to see in a healthy uptrend. Federal Reserve is definitely going to be cutting rates fairly soon. And if that’s the case, that should help silver, but we’ll just have to wait and see how that plays out. Either way, I think this is a market that anytime it drops, there will be plenty of buyers out there looking to pick up a bit of value.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
