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May Silver Trading On Bearish Side Of Retracement Level

ByThe Pattern, Price & Time Report
AuthorJames Hyerczyk
Published 03/23/2012, 03:46 AM
Updated 05/14/2017, 06:45 AM
SI
-0.90%

Based on the main range of $26.27 to $37.58, a key retracement zone has been created at $31.93 to $30.69. With the market currently trading on the weakside of $31.93, traders should look for selling pressure to drive May Silver into the Fibonacci level at $30.59.
Daily-SILVER-Chart
In addition to the retracement zone, the market is also trading under the influence of a pair of Gann angles. These Gann angles have formed a triangle chart pattern that is indicating impending volatility. The triangle chart pattern is a non-trending pattern. The gradual narrowing of the support and resistance lines compresses the market, setting it up for a volatile breakout move. Since the main trend is down, this next move is likely to be to the downside.

Currently, a downtrending Gann angle is providing resistance at $32.46. May Silver is likely to remain in a bearish state as long as it remains under this Gann angle. The first downside target today is an uptrending Gann angle from the $26.27 bottom at $30.83. A break through this price will likely mean a test of the Fibonacci level at $30.59. Once the market clears this minor support cluster, May Silver is likely to accelerate to the downside since the nearest support level is $29.00.

After several days of sideways trading, May Silver appears to be readying for a resumption of its downtrend. Like any breakout pattern, increased volatility and rising volume should help drive up momentum. This would be a strong sign that short-sellers are trading with clarity and conviction.

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