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Technical Precious Metals
Written by article default Monday, 30 January 2012 07:25
Weekly Report: (30 Jan-3 Feb)
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We recognize a double harmonic structure over the daily chart, where this structure contains the formation of a Bat harmonic pattern, which started at X1 point, and the formation of a Butterfly harmonic pattern that started at X2 point. Despite the fact that both patterns are not ideal, but we can see on the interval that this bullish structure was able to push the metal towards 88.6% Fibonacci correction of the CD leg at 1735.00, where this barrier could separate between testing the top of (C) point and retesting areas around 1711.40 as ADX didn’t confirm the end of the bullish wave despite the weakness seen on the indicator. Therefore, we remain neutral in our weekly report and recommend reviewing our next reports for more confirmations regarding the metal's next move.
The trading range for this week is among the key support at 1670.00and key resistance now at 1772.00.
The short-term trend is to the upside with steady weekly closing above 1475.00 targeting 1945.00.
| Support | 1720.00 | 1710.00 | 1702.00 | 1687.00 | 1670.00 |
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| Resistance | 1735.00 | 1744.00 | 1756.00 | 1763.00 | 1772.00 |
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| Recommendation | Based on the charts and explanations above, we remain neutral due to the high risk associated to our expectations | ||||
Silver
Weekly Report: (30 Jan-3 Feb)
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Our negative expectations failed after the consolidation above 32.75, and now we recognize a bullish Bat harmonic pattern over the daily chart. The metal trades now in areas around the top of (C) point, but without providing stability above this level, while we find the momentum indicators are within overbought areas. These factors suggest the return of the downside movement, retesting areas around 32.75-80 and maybe 32.05, where consolidation below the top of (C) point at 33.70 could trigger the mentioned bearish retest. In fact, consolidation above 33.70 is necessary for the upside move to test the extended target 127.2% of the harmonic structure at 35.70.
The trading range for today is among the key support at 30.30 and key resistance now at 34.60.
The short-term trend is to the downside with steady weekly closing below 38.00 targeting 20.05.
**New York Candlesticks**
| Support | 33.00 | 32.75 | 32.10 | 31.60 | 31.30 |
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| Resistance | 33.75 | 34.25 | 34.60 | 35.10 | 35.70 |
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| Recommendation | Based on the charts and explanations above, our opinion is selling silver around 33.40, and take profit in stages at (32.75 and 32.05) and stop loss with 4-hour closing above 33.80 might be appropriate | ||||
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