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Indicator Confluence Marked Resistance
Notice on the chart that last week’s new near-term trend high of $33.59 found resistance at the confluence of several indicators. They include the completion of a 100% target for a rising ABCD pattern at $34.51, and two trendlines that mark the top of rising parallel trend channels. There is a larger uptrend that begins from the August 2022 lows and a shorter advance starting from the December lows.
It can be argued that one of the top channel lines may not be in the perfect location. But the fact that the two lines converged around the same price at the time that silver was approaching, and then resistance was seen, followed by a one-day bearish reversal today, shows why confluence can be so useful.
Behavior Around 20-Day Moving Average Should Provide Clues
Since the 20-Day MA was reclaimed on March 11 there has been only one dip to test is at as support. That happened on March 21, and it established a higher swing low. Since resistance has been seen from a high of $34.59, a successful test of support at or above the 20-Day MA, now at $33.35, seems possible. If price is rejected from the area around the 20-Day line, it would be bullish for the short-term uptrend that starts from the late-February higher swing low (C).
That swing low found support around the 50-Day MA. If this or a similar scenario unfolds then silver may continue to challenge highs and resistance around the top channel lines. Whether that could lead to a sustainable advance or not remains to be seen. It is important to add that silver ended last week at its highest weekly closing price since October 2012. This is consistent with the bullish long-term patterns in the price of silver.
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