Weekly Report 02/05 -06/ 05/ 2011

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After touching the first suggested technical target of 49.50, the metal collapsed aggressively with the opening of this week. The full targets of the fifth wave reside at 50.20-50.5 and thus we are probably facing a truncation case. If we looked at the chart of the hourly interval, we will see that five waves might have been drawn on it and therefore, trading below 50.25 will keep this scenario valid. Meanwhile, trading below 45.10 with daily closing will confirm that the reactionary-corrective- structure is in progress. The overbought signs of momentum indicators make us expect more downside movements during this week. A break of 40.60 will accelerate this bearish wave.

Note: Sharp fluctuation might be seen during this week and that makes risk very high with weak probabilities of upside recovery.

The trading range for this week is among the key support at 38.50 and key resistance now at 50.25.

The general trend over short term basis is neutral until we see how the price will behave around 42.05-42.30 during this week.

Previous Report

Support43.8543.0042.6542.0540.95
Resistance45.1046.0546.5046.9047.85
RecommendationBased on the charts and explanations above our opinion is, selling silver around 45.10 gradually targeting 42.05,40.60 and 38.60, while the stop loss is a daily closing above 47.85 might be appropriate.