Chart Of The Day: Silver Turns Bearish On Dollar Strength
Investing.com | Oct 29, 2020 06:36AM ET
Silver completed a second consecutive bearish pattern, as it crosses below its uptrend line since the March lows.
So what pushed silver to its March low? The same thing as usual—dollar strength, since commodities tend to fall as the greenback rises.
Silver completed a rising flag, bearish after the preceding 21% top to bottom plunge of Sept. 18 9/18 to Sept. 24, which itself included the pattern completing downside breakout of a bearish symmetrical triangle.
With these three interactive bearish signals, it will take a powerful market shift to undo the downside momentum.
The 50 DMA has been a resistance since the completion of the triangle, and the price fell yesterday below its 100 DMA.
Both triangle and flag imply a target of $20.00, where lo and behold awaits the 200 DMA.
h2 Trading Strategies/h2Conservative traders would wait for a fall below the Sept. 24 low, the start of the flag, then for a return move that retests the flag’s resistance, before risking a short.
Moderate traders may wait for the same fall and corrective rally for a better entry, if not to retest the flag.
Aggressive traders may short at will, provided they have a coherent trading plan in place they commit to stick to.
Here’s an example:
h3 Trade Sample/h3- Entry: 24
- Stop-Loss: 25
- Risk: 1
- Target: 20
- Reward: 4
- Risk-Reward Ratio: 1:4
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.