Silver at key price point

silver trading
Silver Futures Chart (Weekly) 22 Feb 2013

At the end of another lively trading week silver futures continue to remain heavily bearish on the weekly chart, despite a modest recovery in Thursday’s trading session which has continued overnight on the electronic market with the May silver futures contract closing marginally higher at $28.80 per ounce.

Nevertheless, the weekly chart for silver prices remains weak with the upper area of price resistance clearly defined in the $32.00 per ounce level whilst the lower level is also well defined by the isolated pivot lows in the $26.50 per ounce region.

In addition, and coincident with this level, is the 200 ma (in green) which is currently sitting at the $27 per ounce price point, just above the potential platform of support.

This price level is now critical if further declines in silver are to be brought to a halt but if this level is breached, then we could see a much deeper move for silver prices, particularly if the price action breaks this key technical indicator.

Any bearish move lower could even test the $19.60 area longer term, a price point not seen since 2009.

Moving to our other indicators, these are simply reinforcing this bearish picture. The weekly heat map remains firmly bearish and with volumes on both our time frames also reflecting heavy selling pressure, the outlook, for the time being, continues to be negative.

Finally, the recent sell off in silver has also been exacerbated by a return of US Dollar strength, as evidenced on the dollar index. This too is also at a key technical level, and should the Index break through the 81.60 then this will add further downside momentum to silver, as a result.

By Anna Coulling

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About Anna 1055 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

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