Silver: 16.60 Next Target as Downtrend Still Seems Intact
The medium term daily candle chart below shows the price history of Silver, a contract for difference (CFD) on the underlying precious metal - which is currently trading around 16.89 around time of publication today.
In the last post about this metal in the Ideas You Can Trade series, Silver was described as hanging barely on a support line which has since failed and caused prices to drop sharply.
Since then a low was reached near 16.64 on October 3rd, and Silver had recovered for much of the month trading within the 17.00 range. However, with prices back under 17.00 and the bearish trend lines appearing to still guide the trend direction, if the low reached earlier this month is retested and fails - prices should drop further.
If support is found and a floor established above 16.00 a recovery above 18.00 would enable Silver to regain the support line that it lost hold of in the last mentioned post.
From a longer term perspective, it seems that Silver may reach closer to 13.00 before it returns back to 20.00, looking at the additional chart below (zoomed-out version of the daily the first daily chart.).
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 17.40 with a Limit to take profit @ 17.78 and a stop-loss @ 17.09 Risk/Reward Summary: Limit risk = +38 points profit / (-31) Stop-loss risk = Gain to Loss ratio = 1.22
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 16.75 with a Limit to take profit @ 16.53 and a stop-loss @ 16.97 Risk/Reward Summary: Limit risk = +22 points profit / (-22) Stop-loss risk = Gain to Loss Ratio = 1.00
Medium term chart (daily candles):
Medium term chart (daily candles) zoomed-out: