Forex Technical Update 12.29.2010 – What’s Next for Silver?

By
A A A

Tools:
Simple Moving Average( SMA ) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Fibonacci Study
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)

Last update on Silver: 12.28.2010 Forex Video Technical Update

Silver (XAG/USD)
\

  • 4H : Silver has shown resilience against the decline earlier in December. The RSI was observed to remain above 40 throughout this correction period.
  • Now the market broke above a congestion formation, and the RSI popped above 70 in the 4H chart. The projection for the current rally is to the 30.65 area, which was a 30-year high.
  • If the market has been ranging in 2010, or even just the Q4 of 2010, the 30.65 level should be respected.
  • However, the market has been rallying, and has been very strong since August, although it has gotten a bit choppy since November.
  • What is going to happen if the market breaks above 30.65 ?

\

  • Daily : The daily chart shows 2 things developing.
  • First there WAS a positive reversal that followed the initial bearish divergence development. The market has been following through with this signal, with the projection ending at 31.60 . This is the area the market will likely reach if it breaks above 30.65 .
  • Secondly , there is an extended bearish divergence. This indicates the markets refusing any significant corrections. This also indicates that the bullish attempt is slowly losing steam. This is not to say the market will reverse. This hot previous metal might need a breather to start 2011.
  • Both gold and silver are in this predicament, extended bearish divergence matching with a diagonal triangle formation.
  • The diagonal triangle is either at the beginning of end of a trend. Since we are far from the beginning, we may see 2011 usher in some correction to gold and silver.
  • However, this is a premature anticipation, UNTIL we get a signal such as a break below 28.0 . Very near-term traders who want to short have to beware of support areas at 129.50 as well. Those with a bullish outlook do have to be aware of the bearish divergence, UNLESS the RSI breaks back above 75 - then a bullish continuation might be considered.

Will Silver Top early in 2011, or surge past 30.65 and 31.60? We would love to hear from you
Subscribe and become a membe r to share your views and join live discussions as well as webinars about the markets.

Fan Yang CMT
Chief Technical Strategist
FXTimes

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Commodities

Referenced Stocks: SMA

International Business Times

International Business Times
  • See all for International Business Times
  • View Print Version

More from International Business Times:

Related Videos

Tiny Homes With Big Appeal
Tiny Homes With Big Appeal          

Stocks

Referenced

Most Active by Volume

270,887,127
    $93.89 unch
225,243,115
  • $40.93 ▼ 2.74%
135,900,109
  • $47.52 ▲ 1.80%
89,467,924
  • $5.35 ▼ 1.11%
85,105,358
  • $16.95 ▼ 0.53%
80,748,539
  • $39.80 ▼ 4.21%
68,491,586
  • $3.57 ▼ 1.79%
62,097,356
  • $100.96 ▼ 0.82%
As of 9/19/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com