With all eyes watching for signs of a cyclical precious metals bottom to be confirmed in the trading week ahead, a chart analysis reveals some signs of optimism for silver. The severity of the sell-off likely encouraged some panic selling and large position liquidation as stop-loss orders were triggered. The subsequent bounce from the lows was equally impressive, however, with the price coming up $1.50 per ounce from the lows by Friday's settlement.

The price action from the low aligns with a Channel Up chart pattern, illustrated here as an emerging pattern on the Autochartist 30-minute time interval. This is a continuation pattern, inferring the potential for a further recovery in the price towards the top of the channel. The correction from the rising trend line near $29.50 also coincides with lateral key level support at the same price, further encouraging a retest of upside resistance from here. This would result in a rise back above the $30 handle, opening the door for a potential technical breakout above the Channel Up chart pattern and establishing last week's sell-off as a longer term cyclical low.

Conversely, a reversal back beneath the channel support would also be a key level failure, triggering a short-term downside breakout with a lower price target. If his occurs it would strengthen the bearish case for silver, and may trigger a decline below last week's lows.

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