Magazine article Modern Trader

Silver Looks Ready to Rumble! (Tech Talk)

Magazine article Modern Trader

Silver Looks Ready to Rumble! (Tech Talk)

Article excerpt

There has been a lot of talk among fundamental metals traders lately about an inevitable rally in silver. Technically, the market is ripe for a rally, and the fundamentalist views can only help. We are not talking about anything like the rally fueled by the Hunt brothers in the early 1980s but a sustained, steady move northward. The daily, weekly and monthly charts and technical studies all support the coming rally.

The monthly chart shows a potential saucer bottom with recent prices slipping above the 18-period moving average of the closes, but the weekly chart is where the meat lies. The peaks in January and March in the $4.77 range form a double top that could turn into a perfect inverted head-and-shoulders pattern, and the rally back toward the neckline at that level is a good omen. "The third test is the best" is a saying that has held water among floor traders in many markets for a long time and could lead to a solid breakout after the long controlled run down to the $4 level. …

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