Silver 1 OZ 999 NY (XAG=X) Gains Ground
Silver prices moved considerably higher during Christmas week, posting gains of 3.4 percent and testing the symbolic 18.00 level. This marked silver’s best week since late August.
Equity markets and precious metals are enjoying late-year rallies. Silver and gold, which are safe-haven assets metals, often weaken when risk appetite is high, but this was not the case last week. Investor confidence is high, as geopolitical hot spots such as the Persian Gulf have been calm lately and the U.S. economy remains strong. This has sent the equity markets higher, but at the same time, investors have not abandoned gold and silver. It appears that the odd-man-out from the end of the year party is the U.S. dollar, which was broadly lower last week.
Markets Expecting Improved U.S. Numbers
Investors are expecting stronger U.S. numbers in the final week of the year. Later on Monday, Chicago PMI, an important business barometer, is expected to improve to 48.2 in December, compared to 46.3 in November. On Tuesday, CB Consumer Confidence is projected to accelerate to 128.0 in December, compared to 125.5 in November. The manufacturing PMI is also expected to accelerate, with an estimate of 49.0 December, up from 48.1 pts in November.
Silver Technical Analysis
After a strong gain last week, silver is again pressing on the 18.00 level, which has psychological significance. If the metal continues to rally and crosses above this line, there is room for silver to move upwards, with no resistance until 18.60. On the downside, we find support at 17.25, followed closely by the 50-EMA line at 17.22.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 18.46.
The projected lower bound is: 17.37.
The projected closing price is: 17.91.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with PREC.M.XAG=), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 81.5250. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 12 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 68.14. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 1 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 124.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 12 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.153 at 17.907. Volume was 8,900% above average (trending) and Bollinger Bands were 5% wider than normal.
Open High Low Close Volume___
17.750 17.960 17.750 17.907 44,263
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 17.40 17.25 16.36
Volatility: 14 20 24
Volume: 4,426 885 221
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
PREC.M.XAG= is currently 9.4% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect very strong flows of volume into XAG= (bullish). Our trend forecasting oscillators are currently bullish on XAG= and have had this outlook for the last 6 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.