Monday’s trading session began with a divergence to the upside, which contributed to a modest increase in silver prices. However, the market has drawn back slightly to break below the Friday session’s shooting star’s bottom. The Friday session is an indication of encountering significant resistance, and the Monday candlestick continues to display a great deal of negativity. Several weeks ago, silver initially rose, but there has been no significant decline. Perhaps this is about to transpire.
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Keep in mind that momentum is beginning to wane as we have plowed into an area where there has been a great deal of erratic behavior, as there has been a significant amount of back and forth between the $23 and $24.60 levels. All signs of exhaustion are likely to be exploited, and that is precisely what we are observing. Assuming all other conditions remain constant, a market decline from here could open and move below the ascending 50-day exponential moving average (EMA) near $22.17. It recently rebounded from the 200-Day EMA, so I believe that the 50-Day indicator will be viewed as a potential technical support indicator by a large number of investors.
In spite of this, a break above the highs could pave the way for a move to the $25 level, but there is also the $26 level to consider. Back in the past, there was a great deal of selling pressure at the $26 level, which suggests that it will be exceedingly difficult to break above that level. I anticipate a short-term pullback in this market, but I believe there will be ample purchasers waiting in the wings to take it back up.
Remember that silver is not only a valuable metal, but also an industrial one. Due to the fact that the global economy appears to be poised for a slowdown, industrial demand could very well plummet; therefore, you may want to pay close attention to this aspect of silver.
