Silver Price Forecast: At a Crossroads that Could Swing Either Way

Silver is in an interesting technical position currently as it is compressed between several lines showing potential resistance and possible support. One or more of the lines is very close to breaking, which should assist in identifying the next possible direction for the price of silver.

There is a downtrend line that shows similar potential dynamic resistance to the 20-Day MA, which is at 30.85. It should be watched along with the minor daily swing high at 3.90 from Friday. There are two trendlines around recent lows that reflect potential support as well, one rising and one falling. They crossed on November 28.

Potential Double Bottom Established

Last week’s low of 29.64 was the second low recently. It led to a quick bullish recovery that day and into the following day (Friday). A second bottom of a potential double bottom pattern was thereby established. If silver strengthens above Friday’s high and keeps rising, it will have a chance to trigger the double bottom pattern.

An upside breakout is triggered on a rally above the neckline at 31.54. Notice that the 50-Day MA, which also marks a pivot level, is at 31.76 currently, slightly above the neckline. Another view of the current price range can be seen in the weekly chart (not shown), as it shows a three-week high at 31.54 and a low at 29.64.

Retaining Support

When considering the bigger picture, following a trend high of 34.87 on October 22, silver began to retrace its previous advance. That high looks to have completed a rising five-wave Elliott Wave structure. Support was subsequently seen at 29.68 on November 14 and last Friday at 29.64. Last Friday was a retest of support around the 61.8% Fibonacci retracement. Further, support has been seen around the trendline at the top of the prior retracement channel that started from top of wave-3 at 32.52. In other words, that is a full cycle back to prior trendline resistance that marked a bullish breakout price level.

Break Below 29.64 Could Lead Lower

Regardless of the above bullish scenario, a decisive drop through 29.64 will indicate a possible continuation of the bearish trend. Potential support then looks to be in a range from around 29.24, the 78.6% retracement, and the 200-Day MA, now at 29.15. Lower prices could also be in the works if the weekly lows fail to hold as support.

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