March silver futures followed much the same pattern as gold futures yesterday, closing the session with a narrow spread down candle and ending at $31.71, having touched an intra day high of $31.92.
On the daily silver chart, silver futures are continuing to consolidate into a strong pennant pattern centred around the $31.70 per ounce level. This pattern is further reinforced by a series of isolated pivot highs and pivot lows which stretch between December 2012 and January 2013 with the most recent posted on 31 January.
With a strong platform of support now in place in the $30 per ounce level and with a series of higher lows on the daily candles, silver now appears to be preparing for a breakout to the upside. Should this occur (and the price action is highly suggestive) then the initial target is the resistance at $32.50 but thereafter silver will require sustained momentum to move back towards $34.50 or beyond.
By Anna Coulling
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Charts courtesy of Hawkeyetraders