by Nikhil Gupta, Seeking Alpha:
Silver (NYSEARCA: SLV) is up more than 2 percent at $17.545, having crossed the crucial resistance zone of $17.20-$17.40. With this powerful breakout, bulls have made their intentions very clear – silver goes to $18+ levels now.
Barely a couple of weeks ago, I penned an article titled Silver – Bears Are About To Get Mutilated in which I concluded as,
Shorting silver now could prove to be a costly affair as the underlying momentum remains extremely strong. The commodity has crossed the 50-day SMA in a strongly bullish manner.
Silver will likely face some profit-booking or consolidation near the strong resistance zone of $17.410. A close above this level will catapult the precious metal to $18+ in the next few weeks.
This conclusion played out really well in the days following the publication of the linked article as silver did fall to $16.635 but has sharply rebounded.
I now believe that silver will aim for north of $18 on positive undertone. Technical price charts also tell that there is a significant probability of silver amassing more gains in the coming weeks.
The daily silver price chart below gives investors so many important clues to factor into their analysis.
As one can see, silver has formed a classic Inverse Head & Shoulders technical pattern, which is a bullish, reversal pattern indicating that the underlying may head higher. The confirmation of this pattern is taken when the underlying breaches the resistance zone; in silver’s case, it was $17.20-$17.40 which I discussed earlier. If by the end of today’s trading session, silver manages to close above $17.40, it will be a strong evidence of the dominance of the bulls. In such a case, the precious metal should aim to test the downward sloping resistance level of $18.50.
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