Everyone is talking about the incredible price move in silver on April 18, 2018. Now, everyone wants to know what’s next. Here is our take on the Silver trade and what you need to know.
All the technical and price valuation indicators regarding the relationship of Gold to Silver have been set for many months telling traders that Silver is the clear leader in any price advance in metals.
Current open positions show that a relatively strong short bias has been in place in Silver for a few months. This adds to the potential of a massive short squeeze rally playing out over the next few weeks/months. Additionally, as greater fear enters the markets, Gold and Silver will likely advance quite substantially.
Technically, Silver has entered a new phase of trend on April 11, 2018 with a new price high that broke previous high price levels. This indicated that Silver may attempt a price breakout with a new bullish trend. Additionally, a convoluted FLAG formation completed near that same date and price began to oscillate between $16.00 & $16.65 – retesting support and resistance levels before the breakout new high on April 11. Our longer-term analysis, which we’ll illustrate in the last chart of this series, was clearly showing us this recent price rotation was the setup of a Wave 3 price advance and we just needed to be prepared for it.
This, more detailed technical chart below, illustrates the April 11 new price high breakout as well as the rotation of the primary technical indicators near this April 11th date. Even though we didn’t have any clear closing price advance above technical resistance (near $16.80), we began to see upside pressure building that convinced us the time for the breakout was nearing.
Another key factor to keep in mind is that we had yet to see any real price advance with higher volume – a key element of any sustained price advance. Even as of today, we are seeing the first larger volume day with a moderate price advance. We do not consider this “technical confirmation of any sustained upside move” yet and we are still waiting for a high volume day with an accelerated upside price advance.