Technical Analysis - Silver - From strength to strength

William Adamswilliam.adams@fastmarkets.comHead of Research+44 (0)20 7264 2489

Short term:
Medium term:
Long term:

Resistances:
R1	31.27 Previous high
R2	33.32
R3	34.43
R4	37.51 Feb peak

Support:
S1	31.28 UTL (daily)
S2	30.22 Recent low
S3	29.91
S4	29.41
S5	27.47 SL

Stochastics:
Bullish

Legend:
DTL = Down trend line BB = Bollinger band SL = Support line HRL = Horizontal resistance line MACD = Moving average convergence divergence

Analysis

Last week's bout of consolidation ended abruptly in a sharp rally on Friday afternoon. Follow-through buying has been seen each day since, although prices consolidated slightly yesterday only to be made up by further acceleration higher today.
The high so far has been $32.99 - the next objective is $33.32.
Prices are now cutting through resistance levels from the series of mini-peaks in March and April and have now established a series of higher highs and higher lows.
The stochastics remain just bullish but are choppy while the MACD continues to trend higher.
We said last week that how long silver spent consolidating would give us an idea as to how strong sentiment has become - it appears to have become increasingly bullish now.

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Conclusion

Silver has broken out of its base formation and prices are climbing strongly. We feel a longer-term up trend is now in the making. Expect bouts of consolidation along the way, which may provide opportunities to accumulate.

All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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