SILVER (Futures): Silver retains its bullish bias as it continues to strengthen on the back of its Q1 gains and now looks to recapture its big resistance located at its 2009 high at 19.45 in Q2. This is coming on the back of a recovery off its 2010 low at 14.63 following its decline off the 19.45 level in Nov'09. Though we expect the commodity to recapture that level, its immediate challenge is a break and hold above the 18.87 level, which marks its Jan 11'10 high. Further out, a clearance of the 19.45 level in the present quarter will force further up move towards its 2008 high at 21.35. Both its weekly and monthly studies are supportive of this view. Downside objectives on pullbacks are located at the 17.62 level, its Mar'10 high just invalidated and its Mar'10 low at 16.31 with a breach of thereallowing for more downside weakness towards its 2010 low at 14.63. All in all, our bias remains higher in Q2 having broken above the 17.62 level and maintained within its weekly rising channel.

width=400