Day Trading & Forex Forum

owais

Silver has spent much of the month of August in a fairly tight trading band between the 23rd's 12.69 high and the 14th's 11.74 low.

The inability to push below the bottom of this band suggests that this consolidation fits into the category of continuation pattern. Thus, the odds are growing in favor of an eventual bullish resolution.

Interestingly, 11.74 is also close in proximity to the intersection of the bottom boundary of the bull channel from 9.48. So with 11.74 holding then, we must respect the possibility of a run above the 12.69 range high.

Cycle-based momentum indicators also favor the upside for now, maintaining strength around the neutral zone, leaving them plenty of room to move higher before becoming overbought.

Above 12.69, the next resistance is 13.027-the 61.8% retracement of the 15.22 to 9.48 decline-followed by the prominent reaction high from May 30 at 13.40.

Maintain a neutral, flexible stance for now, but with more potential for a bullish resolution above 12.69.

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