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Silver Corrects

May 01, 2011 6:58 AM ET
lytman02 profile picture
lytman02's Blog
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From $17 a year ago, the price of spot silver rose to an all-time high of $49.78 yesterday way faster than gold’s ascend. One factor is the Middle East unrest and many people who find gold expensive are moving to silver instead.

As seen on it’s chart above, upon tapping $49.78 yesterday, the daily candle stick closed at $46.46. This is clearly a bearish candle signal and indicates a one-day reversal. True enough, silver continued to decline today and could do so in the coming days. However, this doesn’t mean that silver will continuously fall. In fact, its uptrend still remains intact and the price could further head back up once it finds some support. Like I always say, as long as the uptrend remains intact, the bulls will be on its side. In that case, catching the price at the uptrend lines and placing your stop loss below it would be advantageous. At its current chart, the immediate support could be around $44.00. Then after that could be $42.00. In any case silver bounces off those levels and heads back up, it needs to first retest it’s all-time high at $49.78 as heavy selling pressure will most likely be encountered at that level.

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