Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
BLOCKCHAIN INVESTMENT PRIMER - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20
MUST WATCH Before You Waste Money on Buying A New PC Computer System - 27th Nov 20
Gold: Insurance for Prudent Investors, Precious Metals Reduce Risk & Preserve Wealth - 27th Nov 20
How To Spot The End Of An Excess Market Trend Phase - 27th Nov 20
Snow Falling Effect Christmas Lights Outdoor Projector Amazon Review - 27th Nov 20
4 Reasons Why You Shouldn't Put off Your Roof Repairs - 27th Nov 20
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Silver Back in Buying Territory Ahead of Powerful Uptrend

Commodities / Gold and Silver 2013 Feb 24, 2013 - 04:43 PM GMT

By: Clive_Maund

Commodities

Even though the technical indications for silver are not as strongly bullish as those for gold, they are now sufficiently positive that silver is likely to take off higher before much longer, encouraged by the strength that we should soon see reappear in gold. Of course, it will probably take some weeks for sentiment to recover sufficiently to drive a significant rally after the latest sharp drop, so we may see some backing and filling before a sustainable uptrend can get going, but that is normal.


We predicted another downleg in silver in the last update, which was posted on the 10th, due to the still bearish COTs at that time and the way that silver was topping out beneath a zone of resistance. The downleg started the next day and has proven to be quite severe, as we can see on our 7-month chart below. The decline did not pause at the support at the early January bull hammer, but continued lower to another support level and the trendline target shown. The bounce on Thursday and Friday occurred because silver has become critically oversold on its RSI, but it looks weak, and so we could see some more minor downside short-term before the current downleg has completely run its course. Nevertheless, we are believed to be close to an important bottom here.

Silver 7-Month Chart

On its 3-year chart we can see that silver has dropped back close to the lower boundary of its recent trading range. While we may see a little further downside short-term towards the strong support at the bottom of the trading range, it is now viewed as entering buying territory, however, this support is clearly defined and of great importance as it has turned the price back up to start significant rallies on 3 occasions over the past 17 months, so it must hold - if the price breaks below it, it would likely trigger a plunge as lines of stops would be triggered.

Silver 3-Year Chart

Another bullish point to note is that after breaking out of its downtrend back last August - September, silver has not dropped back into it, but has instead drifted back down in a reaction, riding the support above the upper trendline. The current position of the price not far above this trendline and also just above the critical support towards $26.50 suggests that it is now at a very good point for a major new uptrend to start.

The long-term 7-year chart is encouraging as it shows that all of the action from the April - May 2011 highs looks like nothing more than a reaction within an ongoing major uptrend that should re-assert itself before much longer, although as we can see the lower channel has not yet caught up with the price - but it may not have to, given the now super positive outlook for gold.

Silver 7-Year Chart

So it is good to see that we now have at last a significant improvement in silver's COT structure on its latest chart, which, since it is only up to date as of last Tuesday, does not take into account the sharp drop in silver's price that occurred on Wednesday, and so these figures can be presumed to be better still now. However, it must be said that there is considerable room for improvement, and we may see it in the weeks ahead if silver backs and fills for a while above the support before the expected new uptrend begins. That said, it is considered prudent not to wait for that to happen before taking positions, because downside now looks very limited and gold's COT (and other indicators) is already very bullish indeed, meaning that it could take off higher with little delay now.

Silver COT

The public were still too bullish on silver just a few weeks ago, which is a big reason why it plunged, but as we can see on the latest public opinion chart, they have now curbed their enthusiasm, which is a good thing. Public opinion is now back at the more acceptable levels from which a strong uptrend can get started.

Silver Public Opinion

Chart courtesy of www.sentimentrader.com

In conclusion, although silver may back and fill short-term, and possibly drop back a little more towards its key support level at and above $26.50, it is now viewed as being back in buying territory ahead of the powerful uptrend that is expected to develop before much longer that should take it comfortably to new highs.

By Clive Maund
CliveMaund.com

For billing & subscription questions: subscriptions@clivemaund.com

© 2013 Clive Maund - The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maunds opinions are his own, and are not a recommendation or an offer to buy or sell securities. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

Clive Maund Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules