Silver 1 OZ 999 NY (XAG=X) Bullish Flag Pattern Continues to Form

Silver 1 OZ 999 NY (XAG=X) Bullish Flag Pattern Continues to Form

Silver 1 OZ 999 NY (XAG=X) Bullish Flag Pattern Continues to Form

Silver has been consolidating in a relatively small downward sloping channel since hitting a swing high of $18.84 in early-January. That high completed a 14.12% rally off the $16.51 swing low from early-December, which was at support of the 200-day exponential average (ema).

To date the subsequent decline found support at $17.07, which also completed a 78.6% Fibonacci retracement (close enough at $17.01) of the 14.12% advance. Further, support of the long-term uptrend line and lower parallel channel line congregate around the most recent swing low of $17.07.

Breakout of Bullish Wedge

The advance off the December low triggered an upside breakout of a bullish falling wedge as price moved above the downtrend line and 55-day ema around $17.13. This trend continuation pattern has seen only one leg up so far and is likely to see at least a second leg up at some point.

Once a breakout of a price pattern occurs it is normal and healthy to see a retracement of the breakout advance before price is ready to continue, in this case higher. That’s what we’ve been seeing in silver over the past several weeks or so as it consolidates with a downward slope.

Bullish Flag Pattern Formed

During the consolidation phase a potential bullish flag has formed in the daily chart of silver. Although the consolidation phase may continue for a while longer the $17.07 swing low could be the low of the pattern. The uptrend line provides possible future support during short-term weakness. In addition, there are several other price levels to watch for support to be seen if silver falls below the uptrend line.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 18.28.

The projected lower bound is: 17.08.

The projected closing price is: 17.68.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 30 white candles and 19 black candles for a net of 11 white candles.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 54.2999. This is not an overbought or oversold reading. The last signal was a buy 13 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 47.82. 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 18 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 -46. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 15 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAG= closed down -0.360 at 17.671. Volume was 8,900% above average (trending) and Bollinger Bands were 31% narrower than normal.

Open     High      Low     Close     Volume___
18.025 18.091 17.550 17.671 35,637
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 17.80 17.51 16.72
Volatility: 31 22 25
Volume: 3,564 713 178

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.

Summary

PREC.M.XAG= is currently 5.7% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume out of XAG= (bearish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 3 periods.

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