Silver Technical Analysis: Bears Got Cold Feet
Philip Hopf | Apr 07, 2021 07:38AM ET
Well, we naturally are always happy to see our forecasts turn out to be true. Still, the longer we anticipate a movement, the happier we are when they finally become a reality. The same also holds true for the silver market. For roughly 2 months, we stuck to our expectation that the price would fall under $24.04. Last week, it finally happened.
Yes, the bears were finally able to pull the price below this important supporting line. However, what happened next is honestly almost shocking. The bears merely touched the water with their bare feet and pulled it right back as they became anxious to dive under that mark properly. In other words, the price quickly recovered after crossing the supporting line at $24.04 and jumped further up North to approximately $25.
In other words, the bears got cold feet. It is even more surprising, considering that they had so much time to prepare themselves. That being so, the downward movement needs to be postponed. However, in our primary scenario, we certainly see the silver price sinking below $24.04 until somewhere around $22.23, where a countermovement should set in and bring us back above $24.04.
This should be one of the last occasions for a long time that we will see the silver price over that mark, as we expect the price to drop after the conclusion of that countermovement further. Therefore, the price should decline further in the longer term, as we can see in the long-term chart. Here, we have marked a target zone between $18.62 and $13.70, and we see the silver price dropping into that zone. Until the price stabilizes below $24.04, there is a 30% chance that the bulls will come back to push the course above $30.35 to reach new peaks.
It remains to be seen how the bears react to the recovery attempt by the bulls and how the battle turns out. With its slow movement, the whole situation will likely stretch over quite some time.
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