A mid-week short covering rally in the Silver futures has provided some much needed relief for the long side of the market, as the sharp gains offset some of the losses from the precipitous price drop of the last several days. Silver futures managed to close Wednesday's session over $1.00 per ounce from the intra-day lows, and in doing so the market has executed a Breakout buy signal from a large Falling Wedge chart pattern.
The Falling Wedge pattern, seen here on the Autochartist 240-minute time interval, is a very clearly defined formation with solid readings for Quality, Uniformity, and Clarity. The resistance trend line forming the top of the Falling Wedge is somewhat lacking in development, raising the possibility that the market may need to retrace back into the wedge to confirm the strength of the breakout, but the momentum associated with the breakout warrants watching the pattern carefully for a possible continuation of the current strength.
The projected price targets are forecast from the initial breakout level, and point the price of Silver towards a range $28.42 and $29.72 per ounce if the rally is successful. A correction back into the Falling Wedge would negate the bullish outlook for the time being.
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