Silver Futures Index $SILVER (SILVER)

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Unlocking Silver’s Potential: Resistance Challenges and Breakout Signals
By: Bruce Powers | December 18, 2023

• Unlocking the potential for a silver breakout: Indicators align at 24.28, signaling a crucial juncture and setting the stage for a potential upward surge.

Silver reached a high of 24.28 last week before encountering minor resistance. The area of that high and consolidation of the past several days has further tested resistance around that price zone. It has some significance as there are several indicators pointing to resistance in the 24.28 area. The 50% retracement of the most recent downswing is at 24.20. Moreover, resistance of the 20-Day MA (purple) is at 24.05, very close to today’s high of 24.04, and it is joined by the higher downtrend line.



Three Indicators Highlight Price Zone

Notice that the 20-Day line is close to converging with the trendline. When two indicators mark a similar price area, they are intimating that there is some significance to that price area. In other words, it frequently is either strong resistance or marks a pivot for an upside breakout. Since two indicators mark the price level, the rally following the breakout is sometimes more aggressive.

Preparing for Eventual Test of 26.12 High

Silver is working on an eventual advance to new trend highs, following the August 29 bottom at 17.54. An advance above December’s high of 25.91 provides a sign of strength that should lead to a breakout above May’s high of 26.12. Once a daily close occurs above that May high, a bullish trend continuation signal is confirmed, and the rally should accelerate to the upside. It would signal a move away from a consolidation pattern that has been developing for more than six months. Note that a break above 24.28 is also a weekly breakout.

First Breakout Shows Potential of Upside Move

You can see the aggressive demand in the first trendline breakout that began on November 24. Silver accelerated higher before finding resistance at 25.91. A sharp move higher was followed by a fast decline and eventual retest of support at the long-term downtrend line (dark blue). That occurred at the recent swing low at 22.495.

Support Levels

A deeper retracement will be indicated on a drop below today’s low at 23.65. Subsequently, there is a range of possible support from around 23.39 to 23.18. It starts with the 50% retracement and ends with the 61.8% Fibonacci retracement. In between those two levels is the 50-Day MA at 23.32.

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