Silver / USD 03-01-2012

1. 03-01-2012 Weekly chart
SILVER
< XAG/USD >
Are we about to get an upside correction?
As we always prefer, looking to the weekly time
frame to get wider view. First of all, the downside
breakout of the (40 EMA) then facing it again as a
resistant implies the long term downtrend. Which
also apparent in the RSI that turned down form
bullish zone to the bearish one. But by now, the
prices at a high probable support area (light blue
shadow (26.5 - 29)) with the RSI is about to make a
joint breakout with the price, also we have K%D
making across over from OS levels, add to that the
CMF unique indication which already has made its
breakout with some bullish divergence.
We should now zoom in a little to be able to treat
with the short term trend. As we could see on the
daily chart prices made (continuation H&S pattern)
then could get the min. target at the same level of
the prior long selling climax bar. By now, we got a
breakout with heavy volume of a down trend line on
the peaks of the (Right S) and the following down
move with a joint breakout on the

2. Daily chart
K%D with some bullish divergence, also found
support of the extended line on the MACD with
bullish divergence on its histogram indicating
probable cross over.
Now we should say that, all of the preceding
explanation could only indicate a shot term up side
move which could find some resistance (@30) and if
it could overcome it (high probable with the breakout of the
RSI long term down trend after it’s divergence on the last two
intermediate bottoms), it would find a concentration of
supply (@34.5).
If the prices didn’t go of that manner, it would go
the lower support (@ 14.5-19.5) by the decisive
breaking of (26.5)
So, if we decided to trade that move (although it isn’t
recommended to beat the trend) we could buy at current
prices (recommended only two thirds of the desired position)
with a protective stop level by a close below (26) (Or
5% of the capital whichever the smaller)
For the long & intermediate term traders should
be more conservative and buy only the breakout of
(35)
Last price: 26.63