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Signs of Strength Remain
Friday’s advance to a high of $32.31 completed a 61.8% Fibonacci retracement at $32.19 and tested resistance at another trendline. The day ended at the high of the day and at the trendline but above the Fibonacci level. Signs of strength continued Monday, today, as silver traded in the top half of last Friday’s wide range day. It is on track to close strong, near the highs of the day and possibly above last week’s high. Therefore, a daily close above $32.31 will confirm the bull trend continuation signal.
Momentum Slows
Nevertheless, in the short-term silver may be extended as it challenges a key resistance zone. In particular, the 50-Day MA is at $32.51. It was a key trend indicator showing potential support until it failed on April 3, as silver fell sharply through the 20-Day MA, the 50-Day MA, and an uptrend line in one day. The decline was confirmed with a daily close below the trendline.
Prior support of the uptrend was successfully tested as resistance last Friday and then again today. Since silver has advanced by as much as $4.08 or 14.4% as of today’s high, bullish momentum may not be strong enough to reclaim the 50-Day MA and keep rising. A pullback or consolidation may come first. That was a relatively sharp advance in a short amount of time.
50-Day Line Challenges the Advance
However, if silver can reclaim the 50-Day line and then keep rising, the 20-Day MA could see signs of resistance, now at $32.66, and the 78.6% retracement is at $33.25. Either price level could see signs of resistance. A daily close above the 50-Day MA will show continued strength and improve the chance of siler continuing higher.
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