Silver might have hit a major resistance around the $19.00 handle yesterday. The metal had reversed sharply lower since then and managed to close around $18.65 levels. The daily chart has produced a shooting star, hence potential remains tor a bearish reversal.
Let us have a re-look at potential wave counts on the daily chart. The drop since $19.65 in September 2019 through $11.64 in March 2020 was in 3 waves labelled as A-B-C. The subsequent rally through $19.00 levels yesterday is also corrective A-B-C.
High probability remains that Silver is either unfolding as a 3-3-5 flat or an ending diagonal. If the metal is unfolding as a flat, we should see it reverse lower towards $11.60 and further. Furthermore, Silver should sub-divide into 5 waves to complete the flat.
In case of a diagonal, the metal should reverse lower towards $11.60 into 3 waves A-B-C. Furthermore, since a diagonal has 5 such waves (A-B-C), it would take time to complete below $11.60. Either way, Silver should be looking lower from here towards $11.60 over the next few months.
Immediate support is seen at $17.00, while resistance is strong around $19.65 respectively. A drop below $17.00 would confirm that Silver is on its way lower and that bears are here to remain in control for a while.
Alternately, Silver could produce a corrective drop towards $16.50 levels rather than dropping towards $11.60. Either case, Silver needs to drop from current levels, at least towards $16.50 or more, before deciding its next big move.
Technical Analysis Team
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