Technical Analysis – Silver hovers at midpoint of the December-February rectangle
April 4, 2023 2:28 pm
Silver has completed a 2-month round trip and it is currently hovering at the midpoint of the December 2022 – February 2023 rectangle. The bulls managed to overcome, for now, the developing bearish divergence between the silver price action and the stochastic oscillator. However, a higher high above the 24.53 area is needed from the bulls’ standpoint to cement the bullish trend.
The overall technical picture remains somewhat positive for the bulls. The Average Directional Movement Index (ADX) is edging higher, confirming the presence of a bullish trend in silver – the strongest trend since the July 2022 downtrend move. However, the RSI appears to be toppy at the current elevated levels and the stochastic is showing some early signs of rally exhaustion. In addition, the latter is still signaling a bearish divergence.
Should the bulls remain confident, their initial target lies at the January 3 high of 24.53. This is a key level for sentiment and if successfully broken, the 78.6% Fibonacci retracement of March 8, 2022 – September 1, 2022 downtrend 24.92 might prove easier to tackle. The path then appears to be clear until the January 28, 2011 low of 26.39.
On the other hand, the bears would aim for the 23.76 and 23.34 levels, the March 31, 2021 low and the 61.8% Fibonacci retracement respectively. Even lower, the busy 22.21-22.58 area could prove to be a real test of bears’ resolve. This range is defined by the June 6, 2022 high, the 50- and 100-day simple moving averages (SMAs) and the 50% Fibonacci retracement.
To conclude, silver bulls have staged an impressive run since mid-March. However, the overall technical picture still does not look so rosy for them.
Silver has completed a 2-month round trip and it is currently hovering at the midpoint of the December 2022 – February 2023 rectangle. The bulls managed to overcome, for now, the developing bearish divergence between the silver price action and the stochastic oscillator. However, a higher high above the 24.53 area is needed from the bulls’ standpoint to cement the bullish trend.
The overall technical picture remains somewhat positive for the bulls. The Average Directional Movement Index (ADX) is edging higher, confirming the presence of a bullish trend in silver – the strongest trend since the July 2022 downtrend move. However, the RSI appears to be toppy at the current elevated levels and the stochastic is showing some early signs of rally exhaustion. In addition, the latter is still signaling a bearish divergence.
Should the bulls remain confident, their initial target lies at the January 3 high of 24.53. This is a key level for sentiment and if successfully broken, the 78.6% Fibonacci retracement of March 8, 2022 – September 1, 2022 downtrend 24.92 might prove easier to tackle. The path then appears to be clear until the January 28, 2011 low of 26.39.
On the other hand, the bears would aim for the 23.76 and 23.34 levels, the March 31, 2021 low and the 61.8% Fibonacci retracement respectively. Even lower, the busy 22.21-22.58 area could prove to be a real test of bears’ resolve. This range is defined by the June 6, 2022 high, the 50- and 100-day simple moving averages (SMAs) and the 50% Fibonacci retracement.
To conclude, silver bulls have staged an impressive run since mid-March. However, the overall technical picture still does not look so rosy for them.
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