Silver: Pending Break, Upside Preferred
Martin Janson | Oct 26, 2016 08:25AM ET
XAG/USD DAILY
The price has formed a small consolidation triangle/pennant at two different support crosspoint - the first is the 2016 rising trendline support, and the other - old resistance/new support from the 2014-2015 downtrend.
I am more bullish here and waiting for an upside break, because of the previously mentioned strong support and the hidden bullish RSI divergence on the weekly chart.
XAG/USD WEEKLY
I will be looking to enter long in if either of these two things happen:
- A strong clean break above the triangle's first high at the major psychological 18.00 level.
- A bullish break of the Daily RSI bearish momentum trendline accompanied by a break of the triangle's most recent highs at 17.86 (with a smaller position though)
A strong break and close below the 17.00 back below the old broken falling trendline would invalidate my bullish bias on the precious metal, as it would trigger a bearish pennant scenario. However, I am not looking to enter any short positions here and would sit the sidelines in such case.
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