Technical analysis of silver
A closer look at Fig. 2.21(a) shows that silver is currently well off the maximum levels it reached towards the end of April 2011. On 25th April last year it briefly touched 49.805 before starting to fall back. Since then we have not seen anything approaching that level again. The nearest it came to that record price was 44.155 on 23rd August 2011.
The current price of 34.115 is significantly lower than the average price for last year. It is also still marginally lower than the recent maximum of 35.655 we saw on 28th October last year.
Since the end of December, however, we have seen something of a bull run in silver. The current price is significantly higher than the minimum of 26.125 we saw on the 29th of December last year.
Fig. 2.21(a) clearly shows that the price is currently positioned above the Ichimoku cloud. The green Chinkou Span line is also situated above the price of 26 periods ago, emphasising the bull run. Both the blue Kijun Sen and red Tenkan Sen lines are also above the cloud, which further supports the view that a bull run is under way.
Exactly how long this will last depends on whether the price can break through the previous maximum of 35.655. A clear break above this could mean that it is heading for the next psychological barrier, the 44.155 level we saw in August last year.
If it fails to breach 35.655 expect a return to the cloud, avoid short trades before we have seen at least two convincing closes below the cloud, however.
The comment in this blog is the personal opinion of the contributors and not Intertrader.com. The content does not constitute financial, investment or tax advice. You are advised to discuss your specific requirements with an independent financial adviser prior to entering into any bet. Intertrader.com is not responsible and disclaims any and all liability for the content of comments written by contributors to the blog, and the content of any third party sites linked from this blog.