Fan Yang
All posts from Fan Yang
Fan Yang in Fan Yang,

Silver Awaits Consolidation Breakout

Gold continues to rally in October, but silver has been holding steady around the 17.50 handle. Let's take a look at the 4H chart to assess the technical conditions. 

Silver 4H Chart 10/21

(click to enlarge)

After tagging 16.67, which is now the 2014-low, silver has rebounded slightly to the 17.72 area. Then it has formed a consolidation range between 17.05 and 17.72. The 100-, and 50-period simple moving averages (SMAs) in the 4H chart are all clustered together with price hugging them. This is an example of congestion. 

A break below 17.05 would likely revive the downtrend, first toward 16.67. 

A break above 17.85 would clear the October consolidation high as well as the 200-period SMA in the 4H chart. This would be a price bottom signal, which suggests some bullish correction. If we get a pullback from the 18.00 handle, which might provided some resistance in the short-term, we need to see if price can hold above the 17.50 area. Ability to do so will further confirm a bullish correction.