Silver Price Outlook – Silver Continues to Rally on Tuesday

Silver Technical Analysis

The silver market has seen quite a bit of bullish behavior over the last three trading sessions but has touched the top of the channel that we have been trading in and perhaps more importantly, the $42 level. While I do believe that silver is likely to pull back, I think it’s probably more likely than not to find buyers on dips. The $40 level underneath should end up being on the floor in the market, as it was previous resistance.

Ultimately, this is a situation where I think you’re looking for a little bit of value and looking to take advantage of it. A little bit of history on the chart shows that silver does typically jump for two, three, four days and then grind sideways. So, I would anticipate a little bit of a sell-off here, but think of it more or less as a buying opportunity. I wouldn’t be thinking about shorting silver. It’s obviously a bullish trend and likely to eventually try to get to the $50 level.

The $40 level should be held, but even if it doesn’t, there is a gap near $39 that I think a lot of people will watch as well. Silver is extraordinarily volatile, so you will have to be cautious with any position size you put on. But at the end of the day, we’re in an uptrend, and I just don’t see that changing anytime soon. Keep in mind that Friday is non-farm payroll, and that could have a bit of an influence on silver because it will move the bond markets and the US dollar. But once we get through that, we should have a bit more clarity. I would not chase it all the way up here, though.

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