Silver Carves A Potential Top Around $36.00?

7 August 2020

Silver has taken most traders by surprise after producing an impressive rally since March lows around $11.70 handle. The metal has raised through $30.00 levels today before reversing sharply lower. It is trading around $28.30 as we write this article and could be preparing to continue lower.

Silver probable wave counts are as under: The metal has been unfolding as an expanded flat since December 2015 lows around $14.05 levels. An expanded flat is often referred to as a traders’ nightmare as it goes beyond price extremes giving false breakouts.

As noted here, Wave B for Silver had dropped below the price extreme around $14.50 levels and carved yet another low around $11.70 in March. This move created a false notion of a potential breakout lower.

It is important to note that an expanded flat is a 3-3-5 structure where Waves A and B sub divide into 3 waves each followed by a sharp reversal as Wave C unfolds into 5 waves. As noted on the chart, after Wave B lows around $11.70, Silver has managed to carve Wave C higher towards $30.00 levels.

Please note that the recent rally is just a part of the expanded flat 3-3-5 structure, which seems to have completed around $30.00 mark. If the above described corrective wave structure holds well, Silver should remain below $30.00 and reverse sharply lower toward $11.70 at least.

Traders might be inclined to initiate fresh short positions around current levels $28.20/50, with protective stops above $30.50 and projected targets below $11.70 respectively. A break above $30.00 would delay matters further.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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