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