Silver Markets Technical Analysis

The silver market has rallied rather stringently over the last several days and Tuesday was no exception as we are now threatening the $30 level. Quite frankly, a lot of this is overdone and I think you cannot chase silver at these high levels. You are looking for short-term pull banks in order to take advantage of what’s obviously a very bullish market and a couple of areas underneath could serve as that support. The 50-day EMA sits right around the $28.75 level and offers a certain amount of support.

If we were to pull back to that area, I think a lot of people would be interested in trying to pick up cheap silver. If we do break above the $30 level, then it’s possible that we could go looking to the $31 level given enough time as it is an area we had seen a lot of action at previously. And then after that could go looking to the $31.50 region.

That being said though, we’ve had several strong days in a row, so while we do have a lot of impulsivity in favor of silver, the reality is momentum only lasts so long. A little bit of a pullback probably goes a long way into the psyche of buying on the dip and continuing the longer term trend to the upside. This is a market that I will not short sell anytime soon, as it is far too strong. Quite frankly, I think silver will continue to be very noisy, but it looks like the buyers are very much in control at the moment.

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