In a post last month I highlighted the significance of the resistance in the $18.30 per ounce area as detailed with the blue dashed line of the accumulation and distribution indicator which automatically shows the strength of such levels by the thickness of the line. The thicker it is, the stronger the region and for silver, Friday was a key day with the metal breaking and holding above this region and moving inexorably on towards the $19 per ounce area. Friday’s price action was also important for two reasons. First, the wide spread up candle was supported with good volume, and second, it signals a move away from the volume point of control denoted with the yellow dashed line, as bullish momentum continues to hold sway as I suggested it would in my post of the 21st May. The trend monitor indicator confirms this view on the daily chart and with volume now falling away on the VPOC histogram as we approach $19 per ounce and beyond we can expect silver to continue higher once it reaches this level.
To gain some perspective on the longer term we need to move to the weekly chart and this too confirms the bullish sentiment now in place. And here too we also have the metal breaking free from the volume point of control at $18 per ounce and is again confirmed with the trend monitor indicator at the bottom of the chart which has also transition to blue in this timeframe. On this time frame, it is the $19.50 price point which is important as this signals the start of a low volume node ahead which should allow the price to move through here with relative ease and on to the next psychological level of $20 per ounce and beyond.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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