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Silver (XAG=X) Holds Strong Gains After The Retreat From Seven-Year High

$XAG #Silver #FX #Commodities #Trading #Markets #Metastock

Silver
Ticker: XAG=
Price: $26.71

Silver Outlook

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The silver price started the year at the $18 per ounce level, and initially fell to $11 per ounce in March during the broad sell-off in financial markets at the start of the Covid-19 crisis. But it had rebounded to $18 per ounce by May as investment demand for silver increased along with gold.

The market then went on to rally above $29 per ounce in August, its highest level in seven years. The price had retreated to $22 per ounce by late November, but has since moved up to $26 per ounce, for a 44 per cent gain year to date.

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Will a recovery in economic activity lift the silver price further in 2021? Unlike the gold market, where the metal is predominantly an investment vehicle, around two-thirds of silver demand comes from physical industrial applications, such as semiconductors and solders in electronics, solar panels, water purification, batteries and LED lighting as well as jewellery.

Global purchasing manufacturer’s index (PMI) data for November showed its fastest expansion in almost a decade, as demand continued to rise following Covid-19 lockdowns and there was a rebound in international trade flows. The JP Morgan global PMI index rose to a 33-month high of 53.7 in November, up from 53 in October and the fifth straight month above the $50 mark that indicates expansion in activity. Growth was led by strong and accelerated increases in output and exports in China and the US. A continued rebound in industrial activity next year is expected to support the silver price.

But will silver go up further in 2021? The bias is still to the upside and analysts remain bullish on the outlook.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 24.25.

The projected upper bound is: 27.80.

The projected lower bound is: 24.65.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend.

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 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 46.2679. This is not an overbought or oversold reading. The last signal was a sell 4 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 63.10. 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 67 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 buy 17 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAG= closed up 0.342 at 26.192. Volume was 8,900% above average (trending) and Bollinger Bands were 2% wider than normal.

Open    High     Low      Close      Volume
26.065  26.240   25.919   26.192     1,978
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bullish
Long Term:         Bullish
Moving Averages: 10-period     50-period     200-period
Close:           25.63         24.41         21.48
Volatility:      40            41            53
Volume:          198           40            10

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= gapped up today (bullish) on heavy volume. Possibility of a Breakaway Gap which usually signifies the beginning of a major market move. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.

PREC.M.XAG= is currently 21.9% above 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 14 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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