Silver’s Bullish Reversal Today Sets Up Possible Bull Flag Breakout

Silver Forecast Video for 01.08.23 by Bruce Powers

This week’s trading session in silver began with a quick spike below last week’s low before support was found at the day’s low of 23.91. A strong bounce and bullish reversal above Fridays inside day subsequently triggered at 24.39. At the time of this writing, silver is well above Friday’s high and is set to close in a strong position near the day’s high of 24.82. Given the bullish reaction off the day’s low, we can assume the 50% retracement (23.88) is complete, as well a falling ABCD pattern with the CD leg extended by the 127.2% Fibonacci ratio that finishes at 23.86.

Bullish Signal Above Minor Swing High at 25.14

The correction off the 25.25 swing high as well may now be complete. The retracement takes the form of a bull flag trend continuation pattern. Therefore, the expectation is for an eventual upside breakout. To maintain the posture of a potential bull flag silver should see support during pullbacks around the new internal uptrend line or higher as it marks support of an advance with a rising slope starting from the mid-June swing low at 22.10. An increasing angle of ascent implies improving demand. Whether the rate of price appreciation can be sustained however remains to be seen.

Small Symmetrical Triangle Pattern Indicates Imminent Breakout

Although an upside breakout of the bull flag is first indicated on a move above the downtrend line starting from the 25.25 swing high, a move above the minor swing high should be more reliable as a bullish signal. That minor swing high is at 25.14. Current prices are contained within two lines, one heading and one down thereby creating a small symmetrical triangle type pattern. Therefore, a breakout through one of those lines should happen before six trading days.

Downside Support at 61.8% Retracement at 23.56

Given the increase in the slope of the trend there is a risk that the rate of change of price cannot be maintained and that another test of recent lows or a deeper retracement remains a possibility, prior to a bull flag breakout. If today’s low is exceeded to the downside the next lower support zone is around the 61.8% retracement at 23.56. Also, the middle internal uptrend line should see support at a maximum.

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