Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Silver Price Entrenched in Consolidation Pattern Below Key MA and Falling Trendline

Commodities / Gold and Silver 2012 Apr 15, 2012 - 05:57 AM GMT

By: Dr_Jeff_Lewis


After late February’s dramatic false upside breakout in silver that peaked at the $37.48 level on February 29th stunned many technical traders who were expecting a follow-on rally, its subsequent price action fell into what many analysts considered could be a potentially toppish head and shoulders pattern, which had been forming since the early part of this year.

Nevertheless, the failure of silver’s trading volume to confirm a tentative downside neckline break, combined with the market’s subsequent lack of follow through on it, seems to have invalidated this chart pattern. 

Silver Trapped in Range as Downside Momentum Wanes

Although silver did indeed decline as far as $30.99 from its late February high point, the white metal has been taking an extended break from its volatile price action of the past, as it now seems be stuck in an extended consolidation pattern that has been forming since the middle of March.

This consolidating type of price action typically reflects indecision in the market, as demand from buyers provides support, while resistance from sellers provides supply. The result of their competing activities keeps the market price trapped within a relatively tight trading range.

Initial resistance for silver is currently noted on the charts from peaks at $33.05, $33.16, $33.26, while initial support is seen at recent dips down to $31.61, $31.08 and $30.99. Collectively, those levels define the recent consolidating trading range for silver.  Additional resistance shows up at the $34.40 and $37.48 levels.

In addition, momentum for the downside seems to be waning since silver’s 14-day RSI showed a higher reading at the $30.99 low than at the $31.08 low, a somewhat bullish signal. The successive highs at $33.05, $33.16, $33.26 also showed successively higher readings on the 14-day RSI.

Since none of these peaks or troughs managed to take the indicator into overbought or oversold territory, they indicate a lack of conviction in the silver market about its future direction. With that noted, a break of either side of this $30.99 to $33.05 range would be expected to yield a further move of $2.06 in the direction of the breakout.

Silver Continues Trading Below Key 200-day Moving Average and Declining Trendline

The price of silver during this prolonged consolidation phase has remained steadfastly below its key 200-day Moving Average, which currently reads at the $34.30 level and offers considerable resistance to the price.

This closely watched medium term indicator’s slope has also turned mildly negative, indicating a bearish medium term outlook for the metal, which is consistent with its overall decline from the heady heights of the $49.78 peak it attained on April 24th of last year.

Furthermore, after briefly breaking above its 200-day Moving Average and an important declining trend line in late February, the silver market has remained below them both during its recent consolidation phase. That falling trend line is currently drawn at the $33.65 level, which should provide additional resistance to any tentative price rises in silver.

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of and

    Copyright © 2012 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules