Last analysis for Silver expected sideways movement for a few weeks. Price has moved strongly higher for the last week. The preferred Elliott wave count is slightly adjusted.
Summary: The target for this upwards trend to end is either 16.00 (classic analysis) or 16.229 (Elliott wave). This bounce may be viewed as the first primary degree correction within an ongoing downwards trend as long as price does not make a new high above 17.680. At its end, it may offer an opportunity to short silver.
Monthly charts were reviewed here.
New updates to this analysis are in bold.
ELLIOTT WAVE COUNTS
MAIN WAVE COUNT
WEEKLY CHART – TRIANGLE
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This first wave count has good support from classic technical analysis, so it will be favoured. This wave count looks likely.
The first wave count expects that the bear market, which began from the April 2011 high, is incomplete.
Cycle wave a is seen as a five wave impulse for this main wave count.
This first weekly chart sees cycle wave b as a now possibly complete regular contracting triangle.
Primary wave E of the triangle may have ended with an overshoot of the A-C trend line.
Within cycle wave c, primary wave 1 may be a complete impulse. A strong breach of the black Elliott channel about primary wave 1 this week indicates primary wave 1 should be over and now primary wave 2 should be underway.
Primary wave 2 may not move beyond the start of primary wave 1 above 17.680.
Cycle wave c needs to move below the end of cycle wave a in order to avoid a truncation.
DAILY CHART – TRIANGLE
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Primary wave 2 may subdivide as any corrective structure except a triangle. It would most likely subdivide as a zigzag as zigzags are the most common corrective structures.
So far it looks like primary wave 2 may be subdividing as a zigzag. The most likely target for it to end would be about the 0.618 Fibonacci ratio of primary wave 1.
A best fit channel is drawn about primary wave 2, which may find resistance at the upper edge. If the upper edge of the channel is breached, then the channel may need to be redrawn.
Intermediate wave (C) is unfolding as an impulse. Within intermediate wave (C), minuette wave (iv) may not move into minuette wave (i) price territory below 14.788.
ALTERNATE WAVE COUNT
WEEKLY CHART – BULL WAVE COUNT
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Cycle wave II may be a complete double zigzag. Cycle wave II would be very deep at 0.96 of cycle wave I. This is typical behaviour for the first second wave correction within a new trend for commodities.
If it continues any further, then cycle wave II may not move beyond the start of cycle wave I below 13.569.
DAILY CHART – BULL WAVE COUNT
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If cycle wave II is over, then the new trend up for cycle wave III should begin with a five wave structure. This is labelled intermediate wave (1). The structure is still incomplete.
Within the impulse, minuette wave (iv) may not move into minuette wave (i) price territory below 14.635.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Silver has seen a classic downwards breakout from the shaded support zone, which then provided resistance for a small back test.
A target from the breakout of the symmetrical triangle is about 12.08.
Silver may now be bouncing up to test resistance at prior support. Look for strong resistance just above about 15.60 to 16.05.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
On the 26th of December price broke out upwards from a consolidation zone. A target calculated by adding the width of the consolidation to the breakout point is about 16.00.
Published @ 09:44 p.m. EST.
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