You might consider buying
Just some thoughts that you might want to consider buying silver. CYA: SE:
After two slow weeks around the Easter holiday, trading in the global financial markets appears likely to pick up this week, and one of the most interesting developments we’re watching this week comes from the silver market. Though it generally follows the gold market closely, Silver has lagged gold substantially this year, with prices in the grey metal hitting new 2014 lows last week while the yellow metal is still up roughly $70 since New Year’s Day. That said, a confluence of technical factors suggest silver may be due for a bit of a catch-up rally this week.
First of all, last week’s low came in directly at $19.00, a critical previous support level that has held on three previous occasions in the last six months. On each of those three previous tests, Silver rallied at least two dollars to the 20.40 area, though of course there’s no guarantee that prices will necessarily duplicate the feat this time.
Beyond the horizontal support level, Silver has also seen a clear bullish RSI divergence at the recent lows, with price setting a new YTD low last week, while the RSI held above the late March bottom. This development shows declining momentum on the part of the sellers and is often seen as a signal of a near-term bottom. The bullish picture is further strengthened by a Thursday’s large Bullish Engulfing Candle*; this candlestick pattern shows an intraday shift from selling to buying pressure and is often seen at near-term bottoms in the market.
Nonetheless, the technical picture is far from outright bullish. On a longer-term perspective, the commodity has continued to put in lower highs since August 2013 (and, even more broadly, since April 2011), so bulls should stay nimble and be quick to take profits on any bounces. If we do see rates rally from here, the month’s high at $20.40 may provide an initial target for bulls. On the other hand, a break and close back below the $19.00 level would be a very bearish signal and could open the door for another leg lower in the weeks to come.
After two slow weeks around the Easter holiday, trading in the global financial markets appears likely to pick up this week, and one of the most interesting developments we’re watching this week comes from the silver market. Though it generally follows the gold market closely, Silver has lagged gold substantially this year, with prices in the grey metal hitting new 2014 lows last week while the yellow metal is still up roughly $70 since New Year’s Day. That said, a confluence of technical factors suggest silver may be due for a bit of a catch-up rally this week.
First of all, last week’s low came in directly at $19.00, a critical previous support level that has held on three previous occasions in the last six months. On each of those three previous tests, Silver rallied at least two dollars to the 20.40 area, though of course there’s no guarantee that prices will necessarily duplicate the feat this time.
Beyond the horizontal support level, Silver has also seen a clear bullish RSI divergence at the recent lows, with price setting a new YTD low last week, while the RSI held above the late March bottom. This development shows declining momentum on the part of the sellers and is often seen as a signal of a near-term bottom. The bullish picture is further strengthened by a Thursday’s large Bullish Engulfing Candle*; this candlestick pattern shows an intraday shift from selling to buying pressure and is often seen at near-term bottoms in the market.
Nonetheless, the technical picture is far from outright bullish. On a longer-term perspective, the commodity has continued to put in lower highs since August 2013 (and, even more broadly, since April 2011), so bulls should stay nimble and be quick to take profits on any bounces. If we do see rates rally from here, the month’s high at $20.40 may provide an initial target for bulls. On the other hand, a break and close back below the $19.00 level would be a very bearish signal and could open the door for another leg lower in the weeks to come.
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