Silver Price Outlook – Silver Continues to Wobble on Monday

Silver Technical Analysis

The back-and-forth action of silver in the early part of the Monday session suggests that perhaps we are not quite ready to take off to the upside. That makes a certain amount of sense, considering traders really have to deal with a lot of different crosscurrents at the same time. After all, we have a lot of momentum to the upside that has recently been in the market, but we also have to pay close attention to the $50 level.

The $50 level, of course, is an area that has a lot of psychology attached to it. When you look at the longer-term chart, the $50 level is an area that a lot of people will be hesitant to get too aggressive toward, just due to the fact that it has been so important multiple times over the decades.

That being said, last week we did fall pretty significantly only to turn around at the 50-day EMA. If the market were to break down below the $47 level, it could test the 50-day EMA again. But really, this is starting to—well, you can’t really say it yet, that’s the catch—but it is starting to look a lot like a market that is trying to form a top. We got that really impulsive move a couple of weeks ago, only to see a pretty significant sell-off.

Now the question is, where does this high go? This high, especially if it can’t break $50, I think that’s a bad sign, and we go looking to $40. In the meantime, the best thing for those who are bullish on silver is to go sideways. You want to stick around between $47 and $50. You do not want an impulsive move to the upside, because there’s a real chance it doesn’t have enough volume to sustain that.

It is worth noting that recently, volume has fallen off a cliff. Was this distribution? It’s looking more and more like that, although I don’t think it’s safe to start shorting quite yet.

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