Technical Analysis – Silver turns lower after violation of triangle pattern
October 9, 2023 3:29 pm
Silver prices fall sharply following the break of a triangle
Outlook has turned negative, confirmed by ‘death cross’
Psychological level of 20.00 might be next obstacle for sellers
Silver prices fell without a parachute in recent weeks, hitting their lowest levels since March after breaking a triangle pattern to the downside. The violation of the uptrend line that formed the lower side of the triangle coupled with the 50-day simple moving average (SMA) crossing below the 200-day to form a ‘death cross’ suggest the outlook has shifted to negative.
Momentum oscillators paint a gloomy picture as well, although the latest rebound in silver prices has helped pull them away from extreme levels. The RSI seems to have stabilized below 50, and while the MACD remains below its red trigger line, it appears to have bottomed.
In case sellers retake control and push prices lower, the first obstacle that might provide support is the recent low of 20.65. If violated, the spotlight would next turn towards the psychological region of 20.00, where another leg lower might see scope for bearish extensions towards the 18.80 zone.
On the flipside, if buyers remain in charge, initial resistance to any advances might come from the 22.20 zone. A potential move higher could open the door towards the 23.35 area, which is roughly where the death cross between the 50- and 200-day SMAs is located too.
In short, the recent drop in silver prices has turned the technical picture negative. Any extensions below 20.65 could add fuel to the selloff.
Silver prices fall sharply following the break of a triangle
Outlook has turned negative, confirmed by ‘death cross’
Psychological level of 20.00 might be next obstacle for sellers
Silver prices fell without a parachute in recent weeks, hitting their lowest levels since March after breaking a triangle pattern to the downside. The violation of the uptrend line that formed the lower side of the triangle coupled with the 50-day simple moving average (SMA) crossing below the 200-day to form a ‘death cross’ suggest the outlook has shifted to negative.
Momentum oscillators paint a gloomy picture as well, although the latest rebound in silver prices has helped pull them away from extreme levels. The RSI seems to have stabilized below 50, and while the MACD remains below its red trigger line, it appears to have bottomed.
In case sellers retake control and push prices lower, the first obstacle that might provide support is the recent low of 20.65. If violated, the spotlight would next turn towards the psychological region of 20.00, where another leg lower might see scope for bearish extensions towards the 18.80 zone.
On the flipside, if buyers remain in charge, initial resistance to any advances might come from the 22.20 zone. A potential move higher could open the door towards the 23.35 area, which is roughly where the death cross between the 50- and 200-day SMAs is located too.
In short, the recent drop in silver prices has turned the technical picture negative. Any extensions below 20.65 could add fuel to the selloff.
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