Silver extended beyond the recorded peak last May around 19.80, and by assessing the metal over weekly basis, we can see last week’s closing was exactly at this level –shown on the secondary chart below-.
On the other hand, we can see that momentum indicators entered overbought areas which might cause volatility and a downside correctional bias for the last upside wave which started from 17.74 to current levels.
The correction possibility is supported by a bearish Rising Wedge formation with the support at 19.60.
Breaching this level will extend the downside correction targeting 19.10 -38.2% correction- in an attempt to unload the negative momentum before resuming the bullishness.
Therefore, breaching 19.80 signals further bullishness over short term basis targeting the medium term resistance around 23.00 per ounce where daily closing below this level might take the metal towards 19.60 then extending the downside correction as aforesaid.
The short term trend remains to the upside despite the expected downside correction while the 100 MA supports the medium term bullishness and protects it from below.
Crude continues trading below support for the previously breached bullish channel, although the MA 50 maintains its stance as a support barrier that impedes achieving more bearish movement.
More specifically, the chart is showing that the rising wedge pattern has been achieved and its support has been breached; pointing to more expected bearishness for the upcoming period. This points to move bearish activity in the upcoming period, where some fluctuation could be witness alongside a slant towards the upside to retest support for the breached pattern that has currently turned into resistance at 74.95, before heading towards the bearish trend for this week that will start its targets around 71.55. Keep in mind that this descend requires the daily closing below 76.00 to maintain chances of achieving expectations.
The trading range for today is among the key support around 71.55 and the key resistance around 76.85.
The short term trend is to the downside as far as 84.00 remains intact with targets around 61.60.
Support
74.00
73.35
72.45
71.55
71.00
Resistance
71.95
75.40
76.00
76.85
77.20
Recommendation
Based on the charts and explanations above our opinion is selling crude around 74.95 targeting 73.35 and stop loss above 76.00, might be appropriate.
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