Silver: Single Day drop of Nearly One Cent Attracts Bearish Attention
The medium term daily candle chart below shows the price of Silver trading at 19.55 in today's trading session after falling from its high price of 19.97 to a low of 19.21 earlier in the day.
The price of Gold also fell sharply today, and with Silver following a close correlation, the trend for now may become more bearish with the signal of today's price action pointing towards a lower-low likely.
Last time Silver was covered in the Ideas You Can Trade series, in January 2014, the medium term trend had appeared to be turning bearish again, and looking at the additional chart below using current rates (around time of publication) and recent price action, the longer term affect of these trends appears also in the longer term view (using a daily candle chart zoomed out).
If support near 19.55 around current prices can hold, then a bullish path aimed for, whereas if support near current lines fails then 18.70 could be a sooner reality.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 20.91 with a Limit to take profit @ 21.43 and a stop-loss @ 20.39 Risk/Reward Summary: Limit risk = +52 points profit / (-52) Stop-loss risk = Gain to Loss ratio = 1.00
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 18.98 with a Limit to take profit @ 18.51 and a stop-loss @ 19.39 Risk/Reward Summary: Limit risk = +47 points profit / (-41) Stop-loss risk = Gain to Loss Ratio = 1.14
Medium term chart (daily candles):
Medium term chart (daily candles Zoomed out):