Weekly Report 22/08 -26/ 08/ 2011

Our bullish expectations during the past week were achieved; however, the bearish butterfly harmonic pattern failed to stop silver's bullish momentum, where with the start of a new week, the metal breached 61.8% Fibonacci correction as shown above, supporting the possibility of forming new harmonic structure, which couldassist the metal to reach 45.84 and then 47.60. The suggested structure is close to a Bat harmonic pattern, while we will track the metal's movement during the suggested upside move to complete the pattern. Momentum indicators are within overbought areas, which could affect the upside move sharply.

The trading range for today is among the key support at 39.75 and key resistance now at 46.85

The short-term trend is to the downside targeting 26.65 as far as areas of 48.50 remain intact with weekly closing.

Previous Report

RecommendationBased on the charts and explanations above, we recommend buying silver around 42.75 and take profit in stages at (44.35 and 45.85) and stop loss with daily closing below 41.70 might be appropriate.