Once we broke support a few months ago in the metals market, I began pointing to much lower levels b...
Silver's Daily Chart at Critical Juncture
11/24/2009 12:01 am EST
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(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
Price action on spot silver, a daily chart of which is shown, has reached the very top of a key parallel uptrend channel, in the process hitting a new long-term high just short of $19. This high at the top of the parallel uptrend channel also coincides with a 161.8% Fibonacci extension of the bullish run from $16.06 to $17.73 early this month.
The current bullishness in silver mirrors the phenomenal run that has occurred in gold as the latter now hits progressively higher all-time highs. At the current juncture, a potential impending correction could be due both in silver and gold, with downside support in silver residing around the $18 price region.
A clear upside resistance target in the event of further bullishness—as forecasted by the 161.8% Fibonacci extension of the most recent bullish run from $16.99 to $18.79—resides around the $20 price region.
By James Chen, chief technical strategist, FXSolutions.com
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