UPTREND PATTERN IN WEEKLY SILVER CHARTS AND FINAL TARGET FOR THIS CURRENT RALLY
Moving averages play an important role in understanding the market movements and thus help to recognize the trend. There are two types of pattern.
Pattern 1 : Single Process
Pattern 2 : Double Process
When 100MA is above 20MA this process applies.
At first you have to add simple Moving Averages of 4, 10, 20, 50 and 100 in weekly candle chart. After forming bottom Silver crosses 4MA, 10MA & 20 MA and retrace back to 10 MA. After taking support of 10 MA it jumps to 50 MA and then touches 100 MA and from here retrace back to 20 MA support. After another uptrend it comes back to 50MA support level and then takes a slight upside move and comes back to 100MA support level.
Now these support levels go reverse. Again at 100 MA then 50 MA. Consolidation phase mostly ends here. After a long jump silver retraces to 20 MA support. Grand pre-rally begins here.
Once it takes 20 MA support, silver never closes below 4 MA support. After a pole jump a plus mark or a red candle is expected with new highs. This high is about either 25% or 40% up from 20 MA support. From this high point it retraces exact 8.5% till next week with a bounce-back candle. 6th or 7th candle from this bounce-back candle makes a new top (10% or more upside from week lows for two consecutive weeks or with one week gap). Book profits at second 10% weekly hike(from that week's low) and now its time to go short.
When 100MA is below the low, this process applies.
As the name suggest this process complete in two legs. First 'leg' completes properly as single process does but it doesn't take support twice on 100MA and there is no consolidate on 100MA so it takes support on 100MA again to re complete rest of the process with new highs.
Double Process: Leg-1
Double Process: Leg-2
Incomplete (Failed) Rallies :
Incomplete Rally (Single Process) 1:
Silver crossed 20MA and came back to take support of 10MA. It went sharply to cross 50MA next week and tried to cross 100MA but could not succeed.
This rally crossed 10MA and 20MA and came back on support of 10MA. Then it went higher for coming back to take support on 20MA but couldn't hold the support and went down direct on 100MA support. It again rose to touch 50MA and came back to take support on 100MA but closed below 100MA. Anyhow, it managed to recover and next week closed above 100MA. Again they tried to closed above 50MA but couln't quite do so and fell back to 100MA support to restart. This time couldn't hold 100MA support again and finally rally failed.
Incomplete Process (Single Process) :2
This rally had begun properly with 8 weeks consolidation. After crossing 20MA it had to come back for 10MA support but it crossed 50MA and then 100MA. This was a blind rally. It came back to take support on 50MA and 20MA and tried again but couldn't hold up 100MA and fell sharply below 50MA to fuzz this rally.
This current rally started on June 28th, 2013. It crossed 20MA and came back to take support on 10MA last week.
If Silver holds this support for next two weeks on closing basis, bull trend will be confirmed. If, however, this 10MA support breaks for two consecutive weeks on closing basis another drop to $12.78 is possible.
Where the prices will go if Bull run is confirmed?
The very first rally of this series (Single Process 1) almost doubled the prices i.e. from $4.00 to $8.47.
Second rally (Double Process) quadrupled the prices i.e. from $5.43 to $21.34.
Third rally (Single Process 2) sextuplet the prices i.e. from $8.41 to $49.82.
So, the fourth rally (If this holdup) will octuple the prices i.e. from &18.20 to $145.00?
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.