Silver Binary Call Option: March 30, 2015
GOption | Mar 30, 2015 03:44AM ET
Today’s Binary Options Trading Strategy:
• Commodity: Silver
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 16.800
• Upside Potential: The downside potential for this binary put option is 150 pips to 15.300
• Downside Potential: The upside potential for this binary put option is 60 pips to 17.400
Silver has entered a sideways trend inside of its horizontal resistance level after the strong advance away from its intra-day low of 15.286 which was reached on March 11th 2015 took this commodity to an intra-day high of 17.402 recorded on March 26th 2015. This level marked a false breakout above its horizontal resistance level and silver quickly reversed this move and is now approaching breakdown territory. The positive factors of the driving force behind the sharp advance, an unexpectedly dovish US Federal Reserve, are now fading which is likely to lead to a retracement of the advance.
Price action is currently trading inside of its horizontal resistance level from where a sharp decrease in upward momentum is unfolding. Silver is expected to breakdown below its horizontal resistance level and correct down to its ascending support level from where additional downside is likely. Binary options traders can take advantage from the anticipated breakdown with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 16.800 for a risk/reward ratio of 1.0/2.50.
Volatility in silver started to decrease as a sideways trend developed inside of its horizontal resistance level, but an increase in volatility is expected as a breakdown is pending. Buyers are expected to step in and prevent a breakdown from materializing in order to keep the uptrend intact and add to its recent advance. Sellers are expected to successfully force a breakdown which will accelerate this commodity down into its ascending support level from where an additional breakdown is anticipated. This favors binary put options in silver.
Silver will face its first support level at its intra-day low of 16.625 which was reached on March 23rd 2015. This level marks the low recorded prior to the false breakout above its horizontal resistance level. A breakdown below this level will take silver down to its ascending support level around the 16.000 mark. This level represents a key support level and an increase in volatility is expected to accompany a final breakdown which will take this commodity down to its final support level which is located at its intra-day low of 15.286 recorded on March 11th 2015.
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The following economic data out Japan already impacted silver:
Preliminary Industrial Production for the month of February:
• Expectations: A monthly contraction of 1.5% was expected for February, an annualized contraction of 0.3%
• Previous Report’s Data: A monthly increase of 3.7% was reported in January, an annualized contraction of 2.8%
• Released Data: A monthly contraction of 1.5% was reported in February, an annualized contraction of 0.3%
• Impact on silver: The reported contraction in preliminary industrial production is likely to be overshadowed by economic data out of the US; this favors binary put options in silver
In addition the following economic report out of the eurozone is expected to impact silver:
Eurozone Confidence Data for the month of March:
• Expectations: A level of 103.0 in Eurozone Economic Confidence is expected for the month of March, a level of 5.2 in Eurozone Services Confidence and a level of -4.0 in Eurozone Industrial Confidence
• Previous Report’s Data: A level of 102.1 in Eurozone Economic Confidence was reported in the month of February, a level of 4.5 in Eurozone Services Confidence and a level of -4.7 in Eurozone Industrial Confidence
• Impact on silver: The expected increase in eurozone confidence data is likely to apply downward pressure in silver which favors binary put options in this commodity
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