Silver Daily Technical Outlook

Oil N' Gold Team from Oil N' Gold at 11/10/09

Comex Silver (SI)

With 4 hours MACD crossed below signal line, an intraday top is in place at 17.78. Bias id flipped to the downside and deeper fall could be seen to retest 16.12 support. On the upside, above 17.78 will argue that rise from 16.12 is still in progress for 18.175 high.

In the bigger picture, the strong rebound after hitting 55 days EMA dampens the bearish case that silver has topped out at 18.175 with bearish divergence conditions in daily MACD and RSI. We'll stay neutral for the moment. On the downside, break of 16.12 support will affirm the bearish case by completing a head and shoulder reversal pattern. In such case, deeper decline should be seen towards trend line support (now at 13.5) first. Also, note that break there will also confirm that whole medium term rise has completed too.

On the upside, however, above 18.175 will indicate that the medium term rally has resumed and should target 19.55 resistance next. But after all, rise from 8.4 is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall.

Comex Silver Continuous Contract 4 Hours and Daily Charts