Silver 1 OZ 999 NY (XAG=X) Potential Outperformance on Gold/Silver Ratio Pullback

Silver 1 OZ 999 NY (XAG=X) Potential Outperformance on Gold/Silver Ratio Pullback

Silver 1 OZ 999 NY (XAG=X) Potential Outperformance on Gold/Silver Ratio Pullback

Last week, we had highlighted that there was a risk of a pullback before another leg higher in the precious metal given that the surge over the past 1-month saw gold prices at the most overbought levels in decades (full analysis).

As such, with near-term resistance ($1433) holding firm a bout of profit taking had been observed following the outcome of the G20 summit, which unsurprisingly saw the US and China reach a ceasefire to restart trade talks.

However, with the G20 summit now over, focus is back on economic data. So far, this week has seen soft data across the globe with the majority Asian and European PMIs in contraction territory, while there was also little to cheer about with regard to the US ISM Mfg. PMI, despite beating expectations. As such, with global growth showing evidence of moderation, the precious metal may well keep supported.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 15.02.

The projected upper bound is: 15.70.

The projected lower bound is: 14.93.

The projected closing price is: 15.31.

Candlesticks

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 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 46.1334. This is not an overbought or oversold reading. The last signal was a sell 5 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 59.62. 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 7 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 20. This is not a topping or bottoming area. The last signal was a sell 4 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 0 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAG= closed up 0.170 at 15.305. Volume was -0% below average (neutral) and Bollinger Bands were 32% wider than normal.

Open High Low Close Volume___
15.120 15.315 15.000 15.305 0

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period     200-period
Close: 15.30 14.84 14.98
Volatility: 17 17 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.

Summary

PREC.M.XAG= is currently 2.2% above its 200-period moving average and is in an upward 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 bullish on XAG= and have had this outlook for the last 19 periods.

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