Silver Daily Technical Outlook

Oil N' Gold Team from Oil N' Gold at 01/06/10

Comex Silver (SI)

Silver's reound from 16.765 extends further to as high as 18.03 so far today and further rise could still be seen as the correction continues. Nevertheless, we'd continue to expect upside to be limited by 61.8% retracement of 19.50 to 16.765 at 18.455 and resumption of fall from 19.50. On the downside, below 17.40 minor suppor will flip intraday bias back to the downside. Further break of 16.765 will target 16.12 support next.

In the bigger picture, rise from 12.435 should have completed at 19.50 on bearish divergence condition in daily MACD, after just missing 19.55/21.55 resistance zone. Break of 16.12 support will confirm this case and should target lower trend line support at 13.88 level. This will also be the another signal that whole medium term rise from 8.4 has finished too. Sustained break of the lower trend line support will confirm this medium term bearish case and bring further fall towards 8.4 low.

Also, 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 this 19.55/21.44 resistance zone and bring another medium term fall.

Comex Silver Continuous Contract 4 Hours and Daily Charts