Silver 4H chart 9:05AM EST 12/5/2012
Channel Breakdown: Silver was seen last rallying in a rising channel. After barely making a new high, silver fell back and this time broke down below the rising channel seen in the 4H chart. This breakdown also pushed the RSI below the 40 level in the 4H chart. This reflects a loss of the bullish momentum made in the November rally. In fact if the RSI pushes below 30, there is bearish momentum being born.
Double top: If you consider the latest high at 34.39 insignificantly higher than the previous at 34.27, you can argue that a double top is being complete as the market pushes below the base support at 32.88. This base support is a resistance/support pivot.
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Retracement support: The 61.8% retracement level of 32.08 is also a previous mini-consolidation period support. for now, this could be a bearish target. A conservative target should be considered because there is no trend at the moment, and the further we are from the 200SMA the more likely it will revert back towards it. Then, if the market does break below the 32.00 handle, silver has the 30.65 low in sight.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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