Silver Futures Index $SILVER (SILVER)

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Silver Price Surges to Six-Day High, Testing Key Resistance Levels
By: Bruce Powers | May 6, 2024

• Silver surged to a six-day high as buyers took back control. Test of key resistance could lead to upside breakout or short-term pullback.

Buyers stepped up to support a rally in silver today as the precious metal reached a six-day high of at least 27.49. It continues to trade near the highs of the day at the time of this writing. The high tested resistance around the uptrend line following a sharp drop below the line last Tuesday.

Further, Monday’s high also completed a 38.2% Fibonacci retracement at 27.46. If silver continues to strengthen, the 20-Day MA is next to be tested as resistance. It is currently at a price of 27.58. There is a little concern about the 20-Day line as it recently turned down slightly.



Sharp Rally Off Strong Support Zone

Today’s sharp rally somewhat mirrors the decline last Tuesday but in the opposite direction. There were three sharp declines from the 29.80 high on April 12, starting with that day. Markets will commonly change a pattern after it has occurred three times. Support last week was seen at a swing low of 26.02. It completed a declining ABCD pattern extended by the 127.2% ratio, and it was prior resistance from the swing high of May 5, 2023.

That swing high was significant as it held as resistance 48 weeks. Further, today’s advance recaptured the 26.14 swing high from March 2022. That was a significant swing high, which retained its position for 108 weeks, until an upside breakout on April 3. It is interesting to note that the number 108 has significance in ancient traditions, nature, and the universe.

20-Day Moving Average is Key Indicator

Given today’s wide range day, some backing and filling within the day’s 26.44 to 27.49 price range may occur before silver is ready to move higher. Nevertheless, it should present a more reliable pattern to consider. Regardless, a decisive rally above today’s high will be a sign of strength. Further still, on a rally above the 20-Day line.

Subsequently, a daily close above the 20-Day line will confirm strength and set the stage for higher prices. Until then, it may act as resistance and lead to a pullback. Note that the most recent internal swing high was at 27.73. That price area can be used along with the 20-Day line as a rise above it is bullish, and more so on a daily close above it.

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