In our previous post dated 24Oct14, ‘Silver … Where’s Support?‘, we forecast a test of the $14.81/oz level with the potential for that area halting the downward trend which commenced in Apr11 from the $49.82/oz high.
Silver is in the process of rebounding from a recent low of $15.04/oz, close to, but not the $14.81/oz target we were forecasting. Buying pressure as silver approached the $15 level increased substantially. Expect another test of the $15.04 and $14.81 levels to confirm the potential for trend change. When trend change does occur, it is likely to be very powerful, very strong price action.
Silver is in the process of retracing the major top of $49.82 achieved in Apr11. We expected the $18.185 level to hold support, it didn’t. Here’s what we’re looking for to confirm silver has finally found support:
- continued volatility moderation – the 35 week moving avg back to the 0.70 level
- slow stochastics back below the 20% level (target achieved)
- RSI below the 30 level – currently at 35.12 (target achieved)
- trade back above the newest major downtrend line – approximately $18.185 as of this writing (target revised from $18.84 to $18.185)
Not sure at this point we will achieve the volatility target. Buyer patience has been rewarded, consider buying dips back to the $15/oz level.
Murphy & Co’s Silver model is currently short from the $20.886 level. To learn more about Murphy & Co’s position models, visit http://murphycofutures.com/position-models/.