Technical Analysis - Silver - Waiting for a paradigm shift but until then...

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William Adamswilliam.adams@fastmarkets.comHead of Research+44 (0)20 7264 2489
Short term:Down
Medium term:Flat
Long term:Flat
R133.81 Recent high
R234.425 December high
R335.396 October high
R537.51 February peak
S132.70 UTL
S430.66 November low
S530.22 August 30 low
S726.62 HSL
BB = Bollinger band
HRL = Horizontal resistance line
SL = Support line
UTL = Up trend line
MACD = Moving average convergence divergence


  • This weekly chart shows a broad sideways range. There was solid support around $26.62 and there is strong resistance around $35.70.
  • This suggests prices are oscillating sideways while sentiment shifts but the market will probably need a paradigm shift to break out of this range.
  • [Outside the technicals - a take-off in industrial demand for the host of new nano-technological applications for silver or a ramp-up in monetarisation of silver as confidence in paper money falters might prove enough to push prices higher; otherwise, on the downside silver might break lower if the bull market for gold ends and ETF redemptions follow in force.] 
  • Until then we should probably expect more oscillation within the trend. Crucial now will be whether there is an inner sideways trend running between $30.60 and $35.70 or whether support at $30.60 gives way and prices fall back to the floor around $26.60.
  • We feel prices are pulling back to consolidate in the short term while the stochastics are falling but the MACD holds up relatively well.


We remain bullish overall on silver and are looking for a move back towards $35.00-35.40 although prices may need to consolidate for a while in the short term.

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