Weekly Report 08/08 -12/ 08/ 2011
Silver declined sharply on Friday as expected, but opened the session today higher and is stable above 39.80, which suggest the formation of 5-0harmonic pattern. This pattern is not yet confirmed, however, themetal's movement is signaling a possibility of forming this pattern. Themetal is forming the BC leg of the harmonic pattern, which will be completed at 41.25, 42.15 or 42.70, noting that 41.25 and 42.15 are very close to the previously mentioned main resistance, where the possibility of forming the leg at one of those levels is high. Therefore, we expect an upside trend for this week, but after completing the leg, we could see downside movement. A breach of 42.70 and consolidation above it should negate our suggested pattern and also the downside correction.
The trading range for today is among the key support at 37.30 and key resistance now at 43.85.
The short-term trend is to the downside targeting 26.65 as far as areas of 48.50 remain intact with weekly closing.
|Recommendation||Based on the charts and explanations above, we recommend buying silver around 40.00 and take profit in stages at (41.25, 41.70 and 42.15) and stop loss with 4-hour below 39.20 might be appropriate this week, but we also recommend checking our coming daily reports.|