Silver 1 OZ 999 NY (XAG=X) breakout could be coming
A couple of weeks back gold price exploded out of a large wedge to highs not seen in six years, which has bullion looking bullish for the foreseeable future as long as any correction it has doesn’t lead to a drop back inside the wedge.
Looking at the size of the wedge it could be a pretty sizable move, somewhere to the upper-half of the 1600s is a reasonable expectation (if not higher). The breakout, though, has left silver even further behind than it already was. The gold/silver ratio has been rallying since 2011, when precious metals topped, trading at the best levels since the early 90s. But the ratio may be getting near a point of topping, at least temporarily.
Turning to silver, we see it is still stuck in a wedge on the weekly time-frame, that while not as broad as gold, could lead to a pretty sizable breakout. And soon. A breakout in silver may be the spark it needs to also get into gear against gold and start taking back some of the underperformance versus its sibling.
But even if doesn’t outperform gold, silver could get a strong bid. The depth of silver’s wedge points to a measured move target (MMT) in the 22s. With that said, from a tactical standpoint, it is currently trading at the top of the wedge and as such not a good risk/reward buy at resistance. Get outside the wedge and the bias changes, with the first line of resistance arriving by way of the 2003 trend-line and then the top of the wedge in the 21s, followed by the MMT.
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 15.01.
The projected upper bound is: 15.70.
The projected lower bound is: 14.93.
The projected closing price is: 15.32.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 20 black candles for a net of 9 white candles.
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 35.3632. This is not an overbought or oversold reading. The last signal was a sell 3 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 61.96. 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 5 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 54. This is not a topping or bottoming area. The last signal was a sell 2 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 21 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.052 at 15.307. Volume was -0% below average (neutral) and Bollinger Bands were 36% wider than normal.
Open High Low Close Volume___
15.220 15.337 15.170 15.307 0
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 15.24 14.83 14.97
Volatility: 15 16 18
Volume: 0 0 0
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 2.3% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 17 periods.