Silver Daily Technical Outlook

Oil N' Gold Team from Oil N' Gold at 01/11/10

Comex Silver (SI)

Silver's rally extends further to as high as 18.86 so far today and the decisive break of 61.8% retracement of 19.50 to 16.78 at 18.46 indicates that whole fall from 19.50 has completed at 16.765 after drawing support from 38.2% retracement of 12.435 to 19.50 at 16.80. Intraday bias remains on the upside for the moment and further rally should be seen to retest 19.50 resistance first. On the downside, below 18.497 minor support will turn intraday bias neutral and bring consolidations before another rise.

In the bigger picture, the stronger than expected rebound from 16.75 dampens the view that silver has topped out 19.50 and revives the possibility that rise from 12.435 is still in progress. Nevertheless, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall. On the downside, break of 16.765 support will revive the case that silver has topped out in medium term and will bring deeper decline towards lower medium term trend line at 14 level.

Comex Silver Continuous Contract 4 Hours and Daily Chart