Silver futures (symbol: SI) have broken down through critical support at the $18.185/oz level. This follows a ‘false breakout’ in Jun14, resulting in the creation of another new major downtrend line. So where does the next major level of support exist? At the $14.81 and the $8.50/oz levels.
Silver is in the process of retracing the major top of $45.82 achieved in Apr11. We expected the $18.185 level to hold support, it didn’t. Here’s what we’re looking for to confirm the 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
- RSI below the 30 level – currently at 35.12
- trade back above the newest major downtrend line – approximately $18.84 as of this writing
Patience to those wanting to buy.
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/.