Silver advanced higher since the end of December and it looks like this movement will be continued for the next few weeks or even months as the price created an inverted head and shoulders formation, which obviously strongly supports that kinds of initiatives.
Let's look at this formation in greater detail. What we have here is a complete pattern with a mature buy signal created on the last day of January. After the bullish breakout of horizontal resistance on the 17.2 USD/oz (which in the same time was a neck line), we got an upswing aiming a down trendline (green) and after that, a comeback aiming the neckline again. But this time traders tested that as support, not resistance. Test was perfect for the buyers as they managed to draw a hammer, so a candlestick with a long tail, showing that the lower levels got rejected.
At the beginning of the new week, traders are following this signal from Friday and are pushing higher. We are testing the down trendline again and so far it looks encouraging as the buying pressure is kept. Breakout seems very near. The next potential resistance is around 38,2% Fibonacci but with this momentum present in the 2017 we should definitely aim much higher than this.
