Treasure Chest | Nov 30 2011
By Rudi Filapek-Vandyck
What?
Silver is currently trading near US$32/oz but technical analysts believe a retreat is in the making.
Background
Three weeks ago FNArena published a story about veteran trader Jeff Clark's observation that a Death Cross on price charts might be a portent for price weakness ahead for silver. (See A Death Cross For Silver).
At the time, market analysts at Oakshire Financial had a similarly bearish view on the outlook for silver prices. Oakshire has again reiterated its negative view this morning. The reason for this ongoing bearish view is based upon technical analysis with recent price action providing additional confirmation that all is not well in the silver market, points out Oakshire.
The main signal responsible is a so-called "Gravestone Doji" which, in combination with falling RSI and MACD indicators are seen as a powerful, leading set of indicators.
Similarly, technical chartists at Barclays also hold a negative short term view on silver. Their analysis centres around the Japanese Ichimoku cloud which is seen as providing strong resistance at present price levels, forcing silver to retreat towards US$28/oz, they predict. The good news is the chartists at Barclays would be buying again at that price level.
The next move higher will take silver to the US$35.70 range highs, predicts Barclays, but the route of least resistance will lead to US$28 first. Analysts at Oakshire believe the next point of interest for silver will be the long term moving average, now at roughly US$28.80/oz.
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
