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Posted by Fan Yang


I am a Chartered Market Technician, but my first encounter with the markets started back in the internet bubble when I thought I was picking great stocks because of great fundamental analysis. While fundamental analysis is an essential part of assessing the market, even the most professional research could be irrelevant without proper experience in the markets. When the bubble burst, I realized that the market is always changing so we must always keep up, but the changes are also anchored to the past so we must understand its history as well.

Silver Rally Stalling at Falling Trendline and 200-day SMA

by Fan Yang on September 4, 2013

in Forex

Technical Update for Silver

Silver Daily chart 9:10AM ET 9/4/2012

silver_09042013

(click chart to view full size)

Upswing: Since finding support at 18.19, silver consolidated then rallied sharply as seen in the daily chart. This rally was stronger than any of the correction rallies since falling from 35.37. In the past week, the upswing has found heavy resistance.

Resistance cluster: There are 3 resistance factors at play:
1) 200-day SMA around 25
2) A falling trendline coming down from the 34.39 Nov. 2012 high
3) a previous resistanc pivot at 24.80
4) We can add that the market was overbought, and showed bearish divergence in the RSI, but that is already resolved and the reaction to resistance already displayed.

There might be a bearish correction brewing, but the overall trend since July is bullish, so buying on a dip could still be valid. But, you can argue that the uptrend needs a break and hold above 25 to extend and therefore, the first bullish target after a dip should be under 25.

Looking at the 4H chart, consider a possible bearish correction toward the 22.26 support pivot in the short-term. It it neutral until a break below 22.25, which can bring back a bearish outlook.

Silver 4H chart 9:15AM ET 9/4/2012

silver_09042013h4

(click chart to view full size)

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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.

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