Silver 1 OZ 999 NY (XAG=X) Confirms Strength that Points to Higher Prices
Silver showed new strength on Tuesday as it advanced above a minor swing high of $17.87. That was the next price point to watch where silver could see some resistance. It did not, and therefore the move gives a new sign that silver is getting stronger following the breakout of a descending wedge pattern last Friday.
Significance of Channel Breakout
Given the breakout of a relatively well constructed descending trend channel silver has the potential to rise above $18 and keep going. The breakout of the channel is the first sign that the larger uptrend may be kicking in.
Back in late December silver broke out of a large bullish descending wedge trend continuation pattern and took off from there before hitting a high of $18.84. That high is now the top of the descending trend channel.
The high to low swing ($16.51 to $18.84) of the wedge breakout rally saw silver advance by 14.12%.
It is not unusual to see a degree of symmetry in price swings in markets. If the current advance in price ends up matching the prior advance, then silver would reach $19.481. That target is derived by starting with the low of the channel at $17.07.
Price Levels to Watch on the Way Up
Other price levels to watch on the way up include the prior swing highs of $18.08 and $18.33. Silver could see resistance or breakthrough, providing a new sign of strength.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 18.77.
The projected lower bound is: 17.62.
The projected closing price is: 18.20.
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 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 32 white candles and 17 black candles for a net of 15 white candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 83.0882. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 24 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 59.59. 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 29 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 204.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 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 0 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.401 at 18.166. Volume was 8,900% above average (trending) and Bollinger Bands were 28% narrower than normal.
Open High Low Close Volume___
17.770 18.229 17.740 18.166 40,013
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 17.72 17.69 16.88
Volatility: 18 21 25
Volume: 4,001 800 200
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 7.6% above its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on XAG= and have had this outlook for the last 14 periods.
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