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Today’s Trading Edge: Silver breaks below key support

 

WWM SILVER JUN 9 2015

Silver prices resumed its longer-term bearish trend last month after price formed a bearish Gartley pattern on May 18th.  Point D of the bearish reversal pattern was confirmed with both the 78.6% Fibonacci retracement level of the X to A leg and the 127.2% Fibonacci expansion of the B to C move.  Price has steadily continued to decline and is tentatively breaking below key support that extends back from the December 1st low of $14.15. 

If selling pressure remains strong, price may find support from the March 11th low of $15.26.   Major support will come from the $14.50 to $15.00 range. 

If we see price stabilize around current market levels, a bearish bias will remain in place as long as we do not see consecutive daily closes above the 200-day SMA.  If price is able to recapture the $16.64 level, further upside may target the $17.50 region.     

The trade: Sell Silver at $16.10 with a stop loss at $16.60 and a take profit at $14.70 The Risk/Reward Ratio is almost 1: 3

Edward J. Moya

Senior Market Strategist

WorldWideMarkets Online Trading

Forex Trading Demo
 


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