Major reversal ahead? Longer term analysis for Silver

5 сент. 2015 г.

Since its peak in 2011, XAGUSD (Silver) is on a clear downtrend that only accelerated since the second half of 2012 (only minor pullbacks as sellers became more aggressive).

On November 2014, just as QE ended, Silver touched the PRZ of a weekly bullish Bat pattern (notice that B point didn't reach 61.8 to make it a Gartley). Despite the light pullback that created C point (usually in Bats, C shows a deeper pullback that almost reaches back to A) it is still a valid Bat and that Weekly Pinbar that we got when the price touch the PRZ in Nov 2014 shows that there are buyers near 14-15$ that is also a major structure zone, as you can see from historical price behavior

Since the spike in Nov 2014, Silver managed to create another weekly pattern, a smaller one - Gartley (pink) - that the price is now trying to test X point (13.8$)

So we have to patterns that may indicate that Silver may be on the verge of a huge turn.. but there's no confirmation yet!
The price is still below the Fast and 50 SMA line that both, along with the weekly downtrend line create a strong resistance zone near 16$.
Only if the price will break above 15-16$, it will create a longer term buy signal.. meanwhile, 15-16 could be the short term target zone for the smaller Gartley pattern.

If the yellow Bat will play out and we will see price breaking 16$, we are talking about a rally that could reach 20$, 26$, and 32$ as weekly target zones.

The longer term trading opportunity shown in the chart shows a Risk/Reward ratio of about 4!!

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