Weekly Report 27/12 -31/ 12/ 2010

Silver is moving within a very tight range, creating range trading areas as seen on the provided four hour chart. The ceiling of this range resides at 29.55, while 28.65 act as a floor. The following two technical factors are still negatively pressuring the movements of the metal:

1-The bearishness of the harmonic formation since it still has downside targets to be reached.

2- Moving comfortably below the previous broken harmonic uptrend line, seen on the image.

Henceforth, potential downside actions could be witnessed during this week, supported by the overbought signs appearing on momentum indicators. A breakout below 28.65 will accelerate this highly predicted bearishness.

The trading range for this week is among the key support at 27.15 and key resistance now at 31.20.

The general trend over the short term basis is to the downside targeting $ 22.95 per ounce as far as areas of 29.80 remain intact.

Previous Report

Support29.8528.6528.4528.2027.90
Resistance29.5529.8530.0030.2530.60
RecommendationBased on the charts and explanations above our opinion is, selling around 29.60 targeting 28.20 and stop loss with a daily closing above 30.80 might be appropriate.