Silver, like gold, has some technical challenges ahead on the daily chart, and just like gold is trading in congestion between $25.50 per ounce to the upside and $22.50 per ounce to the downside.
However, throughout this period from late September and through to the current month, there have been repeated signals, that silver is rebasing in this congestion phase and preparing to rally.
The evidence for this can be seen in the arrangement of the candles and the predominance of these with deep wicks to the lower body, a signal of buyers stepping in each time the market falls. Note also how these are associated with higher volumes which confirms the strength of buying in this accumulation phase of price action.
The key levels for any development of a bullish trend are twofold. First, it is that being tested at the time of writing in the $25 per ounce area and denoted with the red dashed line of the accumulation and distribution indicator. This is a strong region and one which is to be breached as the first step in any firm move higher.
Next comes the $25.50 per ounce level where two previous rallies have failed and this too needs to be taken out if accomplished expect to see silver begin to climb and regain the VPOC at $27.20 per ounce.
But, just like gold, this is going to be a slow recovery as we can expect congestion to build at the VPOC before we can expect a return to bullish sentiment and a move beyond $30 per ounce longer-term, where the volume on the VPOC histogram falls away rapidly.