Silver Forecast: Potential Double Bottom and ABCD Pattern Signal Upside Potential

Silver Forecast Video for 04.07.23 by Bruce Powers

Silver hit a corrective low of 22.10 two weeks ago and has been attempting to rally off that low since. It is possible that 22.10 is the completion of the correction off the May 5, 26.12 trend high. It was marked by support of the 61.8% Fibonacci retracement, as well as the 127.2% Fibonacci extension of the previous minor advance within a larger down trending channel.

Possible Bullish Double Bottom Setup

Last week, support around the corrective bottom was tested a second time, with price rejected off 22.26, a second swing low. That swing low could be the second bottom of a potential double bottom bullish reversal pattern. However, not until there is a valid signal on a move above the neckline at 23.08, followed by confirmation of the breakout on a daily close above the level. Until then, we have consolidation around the potential bottom of a declining trend.

Downward Pressure Remains Off 200-Day EMA Resistance

Notice that each of the last two small rallies found resistance around the 200-Day EMA, including today (so far). Currently, silver is below resistance of the line at 22.87, and therefore is set to close today below the 200-Day line. This reflects continued signs of resistance as silver attempts to reverse higher, indicating that the downtrend remains the dominant force. At the same time, a clear pivot level of 23.08 was tested as resistance twice and has stopped the advance. We can then extrapolate that if the pivot is busted to the upside there is a possibility of increased momentum as demand increases.

ABCD Pattern Targets 23.25

In addition to the potentially bullish double bottom pattern present, there is also a developing ABCD pattern where we’re looking for the CD leg of the pattern to match the price appreciation in the first leg up as seen with the AB leg. Each pattern provides a potential upside target. The AB equals CD pattern completes its minimum target at 23.25. Together with the 50% retracement at 23.31, a potential resistance zone from 23.25 to 23.31 is identified. Further, notice that the 34-Day EMA, now at 23.37, and the downtrend line are close to converging with the price zone thereby increasing its potential significance as a pivot area.

The double bottom pattern provides a minimum target of 24.06, just based on the pattern. You can see on the chart that a potential resistance zone from 23.52 to 23.59 would have to be exceeded first.

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