Traders should keep an eye on silver this week. It’s setting up for a big move.
For the past two months, silver has been chopping back and forth in a relatively tight trading range. This allowed the chart to build up energy to fuel a big move in one direction or the other. Now, it looks like that move will get started soon.
Take a look…
The red lines on the chart show the trading range silver has been in for the past two months. The blue lines show a “consolidating triangle” pattern – which is a series of higher lows and lower highs – that often occurs just before a breakout move. The chart is approaching the apex of that triangle. So, we’re likely to get a breakout within the next several days.
Breakouts from similar patterns earlier this year led to big price moves. And, we’ll likely see the same thing this time as well.
The question, of course is… Which way?
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The technical indicators at the bottom of the chart aren’t any help. They’re all in neutral conditions. So, they don’t favor one direction over the other. We might as well just flip a coin.
But… seasonal factors do favor the silver bulls here.
For whatever reason, silver has a habit of rallying during the final weeks of the year. Silver gained 8% in the final six weeks of 2017. It rallied 14% between Thanksgiving and Christmas in 2018. Silver popped 8% in the last few weeks of 2019.
And, it’s setting up for another big move this year.
I think the bulls have the edge.
But, traders should respect a move in either direction. A move above $24.70 per ounce should get a rally started. A move below $23.90 will likely lead to a decline.
Best regards and good trading,
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