Silver Daily Technical Outlook

Oil N' Gold Team from Oil N' Gold at 01/27/10

Comex Silver (SI)

The break of 16.765 support confirms the bearish case that whole decline from 19.50 has resumed. At this point, intraday bias remains on the downside and further fall should be seen to 100% projection of 19.50 to 16.756 from 18.925 at 16.19, which is close to 16.12 support. However, considering that 4 hours MACD is staying above signal line, break of 16.97 minor resistance will indicate that a short term bottom is possibly in place and strong rebound might be seen. But after all, another fall is still expected as long as 18.925 resistance holds even in case of recovery.

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 from 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 Charts