Silver 1 OZ 999 NY (XAG=X) choppy five-week-old uptrend is in place
Gold prices are modestly up in early U.S. trading Thursday, supported in part by a big drop in the U.S. dollar index today. Some safe-haven demand has also been featured recently, amid a very shaky U.S. stock market that saw the equity indexes hit new lows for the year overnight. February gold futures were last up $2.40 an ounce at $1,258.80. March Comex silver was down $0.013 at $14.805 an ounce.
European stock markets were mostly lower overnight, following the solid losses in the U.S. stock market Wednesday that drove the indexes to new lows for the year. U.S. stock indexes are pointed toward slightly higher openings when the New York day session begins. However, the U.S. stock market is very wobbly and traders are leery of another big drop.
March silver futures bears still have the overall near-term technical advantage. However, a choppy five-week-old uptrend is in place on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $15.055 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the November low of $13.985. First resistance is seen at this week’s and last week’s high of $14.90 and then at $15.00. Next support is seen at this week’s low of $14.615 and then at $14.50.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 14.70.
The projected upper bound is: 15.21.
The projected lower bound is: 14.38.
The projected closing price is: 14.79.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 22 white candles and 28 black candles for a net of 6 black 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 59.2117. This is not an overbought or oversold reading. The last signal was a buy 16 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 60.04. 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 buy 76 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 109.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 13 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.193 at 14.790. Volume was 8,900% above average (trending) and Bollinger Bands were 7% narrower than normal.
Open High Low Close Volume___
14.595 14.842 14.510 14.790 12,215
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 14.64 14.48 15.40
Volatility: 16 18 20
Volume: 1,222 244 61
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 3.9% below 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 9 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.
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