Silver had reached a Major Resistance. Now What?

Silver had reached a Major Resistance.  Now What?  Silver has been on a huge upward movement along with the other metals.   It has gone up over 50% since the beginning of the year.    How far will it go up now?  Will it reverse or consolidate now?  What is the forecast?

In order to answer these questions, let’s look at the charts.

Below is monthly chart of $YI Mini Silver Futures provided by Tradestation.   April 2013, the monthly sentiment changed to Bearish and it entered a long term bearish trend going to test the low’s from 2008 by end of 2015.   In 2016, Silver registered a “temp” bottom and started an upward movement which is a bullish pull back.     The resistance at 18.078 controlled what type of pull back that was going to occur.   If this resistance held, the bearish trend would still be strong and it would continue to go down with a strong bearish momentum.    If it broke this resistance, now Silver can engage in a major bullish pull back on it’s way to the bottom of the cloud.

Last month, broke this resistance and price went to the next major resistance which was 21.210.   This resistance held so far.    The current monthly support is 18.078.    As long as this support holds, we have a high probability of getting to cloud now.

2016-07-07_silver_m

Below is the weekly chart.   It is in a major bullish trend being held by support at 17.541.   The weekly support at 17.541 matches the monthly support too so this is an iMTF™ support.

2016-07-07_silver_w

The best trades are where you enter at the “boundary” conditions, the critical level because the risk is the lowest and it offers the best reward/risk.   In this case, it would be 17.541.     This is a higher time frame iMTF™.    If the bullish trend is extremely strong, lower time frame iMTF™ will develop to have supports going higher.

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About the Author Manesh Patel