11.3% higher than the recent low
Still, silver rose as much as 11.3% in the seven days since recovering from the swing low at 26.47. The swing low also completed a successful test of support around the 200-day MA, which was slightly lower at 26.08. This was the first test of support around the 200-day line since silver rose above this line in early March, sparking a strong multi-week rally. Therefore, this correction is expected to be complete.
Watch for support at 20-day MA on weakness
Regardless, short-term weakness can occur at any time, as today is the third consecutive day of uptrending. If a pullback does occur, first look for support around the 50-day line at 29.20. Then there is the 20-day MA at a price of 28.11. Note that this was tested on Friday with the daily low as support. A rising ABCD pattern has been added to the chart (purple) from the recent swing low (A). The initial targets have already been exceeded, leaving a 161.8% extended target at 29.74. This corresponds to the 61.8% retracement and therefore highlights the potential for a strong pivot in this price area.
Bullish weekly signal in play
Silver triggered a bullish reversal on its weekly chart last week and today’s rise confirms the breakout. This is further evidence of the likely continuation of the developing bull trend. Keep in mind that last week was the first week with a weekly bullish signal, so the rally could still be in the early stages that should eventually lead to a rise above the recent trend high of 32.52 from May.
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