Monday, March 11, 2013

Silver ready for a bounce?

Here are my observations on the technical's of the Silver market at this time. It has been in a consolidation period since the blow off of 5/11 which will be almost 2 years.

Weekly Silver chart from Jan, 2011.

Indicators on this chart (I know it is a bit 'busy'):
Moving averages of 20, 50, 100 and 200.
Fibonacci from the last low just over $26 to the last high around $35.
Bollinger band
Major long term trend lines in light blue (Double channel)
Mid term trend line in white

Ready for a bounce???  Silver is rising out of an oversold area on the Slow Stocastics, off of the bottom of the 23.6 fibonacci retracement level and rising after bouncing off the lower trend line which is now support. (At least for the time being)

If you look at the yearly price of Silver over the last few years, it has often put in the lowest price during the first 3-4 months of the year.  Based on that, we may have seen the low price of the year already....?

I'm looking for a bounce back up near the upper trend line. (Another lower trend line is not drawn which is near the $31 level.  Resistance levels at the 20 day moving average of $29.40, fibonacci level 38.2 around $29.75, 50 day moving average at $30.60 and the 50% fibonacci retracement of $30.80.

I picked up some 'paper' Silver last week and the week before for a swing trade. You can take a percentage of profits from the paper trades and purchase physical. As many people do, dollar cost average into the metals.

Weekly Silver from 2003
The longer term Silver chart has a double upwards channel in light blue. The lower channel was just pierced which IMO makes the Silver metal undervalued just like in 2008. David Morgan has mentioned that price 'manipulation or management' can be done in the short to mid term,  but cannot be done over the long term. Well, if that is the case and you believe it, Silver is a pretty good buy if you are a contrarian investor.

Lastly on this chart is a timeline fibonacci that is started on the 5/06 spike high to the low in 11/08. The has projected a date around 4/11 which was the parabolic spike high of $49.  The next date (not shown on this chart) is near the end of Oct 13 or start of Nov 13.  Based on the fibonacci timeline, something 'big' is going to happen near this time, we shall see.........

No comments:

Post a Comment