Silver might have carved a meaningful top around $30.00 mark in mid-August 2020. The metal has since dropped through $22.00 levels recently, in line with expectations. Bears might want to remain in control going forward and push through $19.00 mark in near term.
Silver probable wave counts are as follows: The metal has been in a multi-year corrective wave after having print highs around $50.00 mark in 2011. The entire drop between $50.00 and $13.67 was Wave (A) of the corrective drop.
Wave (B) seems to have unfolded as an expanded flat structure since $13.67 lows. The last leg of expanded flat was between sub $11.00 lows in March through $30.00 highs in August respectively. If the above structure is correct, Silver is expected to produce Wave (C) lower from here.
Now looking at the lower degree wave structure, the drop between $30.00 through $23.44 could be a lower degree Wave 1 as labelled on the chart here. The subsequent rally towards $28.90 might be potential Wave 2 and Wave 3 might be underway towards $19.00 levels.
Also note that Wave 2 had terminated around fibonacci 0.618 retracement of Wave 1 which is ideal according to guidelines of the wave principle. Silver might produce a corrective pullback towards $27.00 levels before dropping lower towards $19.00.
Traders might be prepared to hold short positions taken earlier and might be looking to add more around $27.00 levels going further. The protective stops remain above $30.00 and projected targets towards $19.00 respectively.
Technical Analysis Team
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