Silver 1 OZ 999 NY (XAG=X) some profit taking from recent gains and a downside technical correction
Gold and silver prices are down in early U.S. trading Thursday, on some profit taking from recent gains and a downside technical correction—both of which are not unexpected. In fact, it can be argued that for a price uptrend to be sustained, it must have healthy downside corrections. Gold prices hit a 10-month high on Wednesday.
March silver futures bulls have the near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. However, more selling pressure in the near term would produce a bearish double-top reversal pattern on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the January high of $16.20 an ounce.
The next downside price breakout objective for the bears is closing prices below solid support at the February low of $15.445. First resistance is seen at $16.00 and then at $16.20. Next support is seen at the overnight low of $15.815 and then at this week’s low of $15.715.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 16.24.
The projected lower bound is: 15.44.
The projected closing price is: 15.84.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 6 white candles and 3 black candles for a net of 3 white candles. During the past 50 bars, there have been 29 white candles and 20 black candles for a net of 9 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with PREC.M.XAG=). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) 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 69.5262. This is not an overbought or oversold reading. The last signal was a sell 0 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 54.48. 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 14 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 82. This is not a topping or bottoming area. The last signal was a sell 0 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 1 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed down -0.216 at 15.814. Volume was 8,900% above average (trending) and Bollinger Bands were 37% narrower than normal.
Open High Low Close Volume___
16.057 16.101 15.750 15.814 11,943
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 15.78 15.48 15.20
Volatility: 15 17 19
Volume: 1,194 239 60
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 4.0% above its 200-period moving average and is in an downward 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 out of XAG= (bearish). Our trend forecasting oscillators are currently bearish on XAG= and have had this outlook for the last 7 periods.