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A continuation pattern has formed on the silver charts setting up a breakout play to the upside.
The 4-hour chart displays a triangle chart pattern with the ascending leg beginning on the 3rd of November and the descending leg beginning at the all-time price high of silver at $29.34.
Traders should be anticipating a breakout to the upside as this trade would be in line with the direction of the long term trend . However, a breakout lower is also viable but less likely.
To find the expected move following a breakout the base of the triangle is measured. Therefore, we can anticipate a potential move higher of $5 with an approximate target at $32.50.
Patience will be needed as traders should wait for a definitive signal that silver has moved outside of the triangle chart pattern.
A protective stop should be placed inside the triangle to guard against a potential false breakout. The stop can be located below the support at the price of $27 (S1).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
