Silver Analysis June 2015 (D,W)
Created on Monday, 01 June 2015 02:55
Written by Austin Galt
Let’s review the technicals of silver using the daily and weekly charts.
SILVER DAILY CHART
I have drawn a Fibonacci Fan which I showed in previous analysis which has proven to be spot on. Since then this market faked me out a little into thinking there may be lower to go. That doesn’t look to be the case now but not to worry as there still looks to be a nice opportunity to get long at a good price.
We can see a “three strikes and you’re out” bottoming formation around the 88.6% angle denoted by the numbers 1 to 3. The first strike low was just above the 88.6% angle while the second strike low was pretty much bang on it. I expect the third and final strike to be a bit below this 88.6% angle.
The PSAR indicator has a bearish bias with the dots above price.
The Bollinger Bands show price just below the middle band and I am now looking for a move back to the lower band.
The Stochastic and MACD indicators are both looking bearish indicating lower prices are likely.
SILVER WEEKLY CHART
The recent price action looks to be forming a triangle pattern which is generally a continuation pattern. Price now looks headed to the lower trend line and that is where I expect the low to form. This looks set to occur in the first half of June just under $16. Perhaps $15.80??
The PSAR indicator has a bullish bias with price now seemingly headed down to test this support. The dots are likely to be around $15.40 next week and I expect that to hold.
The Bollinger bands show price just above the middle band and while I expect some work to be done around this band it may be asking too much for price to get to the lower band. Let’s see.
The Stochastic and MACD indicators are both bullish and the expected move down at the start of June may not be enough to change this. Both are generally trending up and I expect this to continue as price launches higher shortly.
As for how high this rally reaches, I have a couple of scenarios. The less bullish scenario is price finds resistance at the downtrend line I have drawn. This trend line is not obvious which alone means it is one to watch.
The more bullish scenario which I am starting to favour involves price turning down at one of the three horizontal lines I have drawn which stem from previous swing high levels. I expect more trading to provide more clarity on this issue.
Once that rally high is in place later this year I expect the overall downtrend to resumes which sees new lows made.