Silver Daily Technical Outlook

Oil N' Gold Team from Oil N' Gold at 01/25/10

Comex Silver (SI)

At this point, intraday bias in Silver remains on the downside with 17.52 minor resistance intact. As noted before, whole decline from 19.50 is likely resuming. Break of 16.765 support will confirm this case and target 100% projection of 19.50 to 16.756 from 18.925 at 16.19, which is close to 16.12 support. On the upside, above 17.52 minor resistance will turn intraday bias neutral and bring recovery. But risk will remain on the downside as long as 18.925 resistance holds.

In the bigger picture, the sharp fall from 18.925 suggests that whole decline from 19.50 is still in progress and is resuming. The development revives that case that silver has already topped out in medium term at 19.50. Break of 16.19 projection target will suggest that fall fro 19.50 is developing into an impulsive move which further affirm the reversal scenario and bring deeper decline to lower medium term trend line at 14 level.

On the upside, above 18.925 will suggest that silver has not topped out yet. However, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside 19.55/21.44 resistance zone and bring another medium term fall.

Comex Silver Continuous Contract 4 Hours and Daily Chart