Advance Stalls off Last Week’s High
Last week resistance was seen around the prior swing high of 24.61 from December 22. That price area was noted previously as a possible target as it was clearly resistance in the past. The question now is whether silver continues to progress its uptrend, or it retraces first? Certainly, the chance for a pullback has increased following last week’s price action.
Nevertheless, a decisive rally above last week’s high of 24.64 may see silver hit a higher target before a retracement. The next higher target is around 24.81. That is where the rising ABCD pattern (magenta) completes a 161.8% Fibonacci extension of the pattern. That is the third target from the pattern as each of the lower levels have already been exceeded to the upside.
Bigger Picture Bullish
In the bigger picture there is an initial higher target in silver up around 27.15. That is where a larger rising ABCD pattern completes (green). Given the recent impulse rally seen in silver this higher target looks reasonable. Therefore, traders will be watching for bullish reversal off retracement lows during weakness. A drop below last Friday’s low of 24.17 will signal a pullback.
The 8-Day MA is at 23.83 followed by the 38.2% Fibonacci retracement at 23.73. The last solid resistance level that was broken is down at 23.50 (B), right near the 50% retracement at 23.46. If a retracement does come before new trend highs these price levels are where support might be seen, that leads to a bullish reversal.
Finally, another mention about the monthly chart. A bullish reversal was triggered initially this month. The upside follow-through has indicated strong demand pointing to eventual higher prices.
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