Talking Points
- Silver Prices May be Developing a Bullish Flag Pattern
- Short Term Support for Silver is Found Near $18.80
- If you are looking for more ideas on trading commodities and metals, check out our Trading Guides.
The price of Silver (Ticker: XAG/USD) continues to slide this morning, bringing the commodity to key support near $18.80. This value marks support of a potential descending price channel forming for Silver prices. If prices remain supported here, it opens up price action to bounce back towards resistance. Channel resistance, as depicted below, has been created by connecting a series of swing highs beginning with the July 2016 high at $21.11.
One possibility, suggests that this descending channel is the beginning of a flag pattern. In this scenario, even though prices are currently trading lower, traders may wait for a bullish breakout back in the direction of Silvers primary trend. Traders looking for bullish projections for Silver prices may extrapolate a 1X extension of the markets previous rally. This places potential targets for Silver just under $24.00
Losing Money Trading? This could be why !
Silver Prices Daily Flag Pattern
Chart prepared by Walker England
Alternatively if Silver prices continue to decline, it may suggest that price action is returning back towards a longer term value of support. The Ascending trendline depicted below has been created by connecting a series of higher lows, beginning with the 2016 yearly low at $13.76. This places current trendline support near $17.00. If Silver fails to remain supported hear, it may suggest the beginning of a new bearish trend for the metal.
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Silver Prices Daily Trendline
Chart prepared by Walker England
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