Silver Price Forecast: Struggles at Resistance After Bearish Reversal Signal

Silver completed an ominous bearish weekly shooting star candlestick pattern last week following a new rally high of $33.39 that was reached on Friday. Consequently, the one-day pattern from Friday is also a bearish shooting star pattern. On Monday, silver dipped briefly below Friday’s low of $31.92 before support was seen around a nearby uptrend line. Strength subsequently returned intraday with silver closing in the green.

Weekly Bearish Candle Shows Downward Pressure

Given that Friday’s price range was relatively wide, a continuation of today’s advance from the day’s low is certainly possible. But silver would be advancing inside the price range of a bearish pattern and therefore resistance would be anticipated to eventually be hit, and lead to further weakening. Notice the distinct bearish reaction on Friday once the $33.39 high was reached.

Friday ended near the lows of the day. Although there is a 78.6% retracement level at $33.56, the 161.8% extended target from a rising ABCD pattern (purple) looks to be the pattern influences the bearish reaction. The ABCD pattern reached its extended target at $33.34.

Weekly Chart is Bullish

With last week’s wide range silver could trade this week inside last week’s price range from $31.25 to $33.39. It is interesting to note that last week’s low was at the 20-Week MA and it was the first full weekly range above the 20-Week line since November. This is a sign of strengthening on the longer time frame pattern and therefore noteworthy. It shows the progression of a weekly uptrend from the December swing low, which provides bullish signs as prior resistance has successfully been tested as support.

This makes last week’s low of $31.25 a significant support level. If silver can stay above that low, it will continue to have a chance of proceeding higher as the weekly bull trend will be retained as well as support at the 20-Week line.

Monthly Chart Also Bullish

The bull picture would not be complete without recognizing clues on the monthly chart. During February silver triggered a monthly breakout above January’s high. January was an inside month as trading was contained within the price range from December. The subsequent rally broke out above both December and November’s highs as well, thereby providing additional bullish signals on the long-term time frame.

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