Silver Continues To Remain Bearish Below $30.00

28 August 2020

Silver might be consolidating within a contracting triangle, before giving in to bears again. The metal had earlier hit $30.00 mark before reversing lower. Bears might be looking to be back in control from here soon and a break below $23.40 would accelerate the drop further.

Silver probable wave counts are as follows: The metal might have just completed an expanded flat structure at a larger degree. The structure has taken multiple years to complete since the metal hit $13.50/60 lows in 2011. The expanded flat structure unfolded as a 3-3-5 and might have terminated just below $30.00 mark recently.

If the above larger degree counts hold well, Silver might be on its way to produce 5 waves lower from here, which could drag prices below $11.64 lows in March 2020. It might be too early to predict such a move at this time, but a drop below $23.40 would certainly confirm the same.

Looking further at the wave structure from $30.00 mark, Silver might have completed lower degree Wave 1 around $23.44 and potential Wave 2 around $28.46. If the above counts are correct, a potential Wave 3 should resume lower soon from here.

Alternately, Wave 2 might still be unfolding as a triangle and consolidate further before terminating. Either way, Silver might be preparing to resume Wave 3 lower until prices stay below $30.00 mark, going forward.

Traders might be preparing to initiate fresh short positions as close to $28.00 mark as possible. The protective stop might be placed above $30.00 mark while projected targets clearly point towards $20.00 and lower levels.

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