Weekly Report 21/02 -25/ 02/ 2011

With stability above 32.50, a new bearish harmonic AB=CD pattern appeared, where the BC leg represented 61.8% of AB leg. Therefore, the CD leg is awaited to reach 161.8% of BC leg. Thereby, areas of 34.15 could be visited as far as trading remains above 32.50. A break of 34.15 will bring additional upside rally and will interpret an extended CD leg. Momentum indicators show obvious overbought sign and that is normal since the pattern is bearish but we are following the completion of the CD leg of this pattern during this week.

The trading range for this week is among the key support at 29.05 and key resistance now at 32.55.

We prefer observing 30.80 and 34.15 levels with the weekly closing to confirm the short term direction.

Previous Report

Support32.9032.5532.3531.9531.40
Resistance33.2033.7534.1534.8035.10
RecommendationBased on the charts and explanations above our opinion is, buying silver around 32.55 targeting 34.15 and stop loss with a daily closing below 31.40 might be appropriate.