Silver Price Forecast: Bullish Momentum Faces Key Support Test at 20-Day MA

The larger time frame monthly chart in silver shows a bull breakout earlier this month on a rise above January’s high of $31.74. Subsequently, silver gained as much as $4.65 or 16.2% as of the February high at $33.39. That performance is measured from the swing low of $28.74 hit in mid-December. The February high got very close to completing a 78.6% retracement of the recent bearish correction.

Consolidating Around Highs

Since that high silver has largely consolidated within the price range from the day the peak was reached on February 14. Note that high was reached on a Friday and the day ended with a bearish shooting star candlestick pattern. The low for that day was $32.07.

Silver dipped below $32.07 on the following day but since then trading has been retained within the price range of $32.07 to $33.39 from that day. Overall, the bearish implications from the shooting star candlestick pattern have not been realized.

20-Day MA Offers Key Trend Support

Since the 20-Day MA (purple) was reclaimed on January 28 that line has done a good job of identifying dynamic support for the near-term uptrend. There were two days following where silver dipped to test support around the 20-Day line. It did so again today, Monday, as the day’s low of $32.09 was close to 20-Day MA at $32.03.

Notice that buyers got more aggressive from today’s low, reflecting support. Given the reaction around the 20-Day MA it remains a key dynamic support indicator. A potential change in upward momentum would be indicated if there is a dip below that line that is followed by the price of silver staying below the line.

Weekly Bullish Trend

There is also a weekly low from last week at $31.92 that makes up the weekly uptrend of higher weekly lows that have been in place for four weeks. A pattern of higher weekly highs was in place for seven weeks until last week when there was a lower weekly high. Last week silver ended the weekly session in a relatively weak position in the lower half of the week’s trading range. There was also a weak weekly closing price shown two weeks ago as well.

A decisive decline below the weekly low at $31.92 would further confirm bearish implications following a drop below the 20-Day MA. Since the 20-Day line and the weekly low are relatively close to each other, a drop below the 20-Day MA may find support above the weekly low.

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