By Andrew Nyquist
A while back I wrote a piece on iShares Silver (SLV) pointing out the likelihood of a rollover and subsequent retest of it’s breakout level. At the time, SLV was over $32 and I was analyzing its short-term prospects, while offering a few Silver technical support levels to watch. I didn’t realize that such a roll over would set up a show down with the 4-year trend line. Read: “Silver (SLV) Ready to Roll Over?“
But that is exactly what has happened. In fact, SLV has been chopping sideways since reaching a short-term momentum bottom on December 20 ($28.65). And with the trend line sitting just below, volatility has already begun to tick higher. Note that it’s not uncommon for commodities to experience wild intraday swings, so quick punctures in and around the trend line or recent candlesticks wouldn’t surprise me. Silver technical support resides around $28.60 (the Dec 20 and Jan 4 lows). A break down below $28.00 would likely open the door for another retest of the base and lower end of the sideways channel (near $26.00). Whereas, a move above the January 2 highs ($30.47) would be constructive and a move above the December 12 pivot ($32.71) bullish. See weekly and daily Silver technical support charts below.
Trade safe, trade disciplined.
No position in any of the securities mentioned at the time of publication.