Silver is holding well below its recent swing highs around $30.00 levels. High probability remains for a meaningful top already in place around those highs. Further, the counter trend rally might have terminated around $29.00 levels. Bears might be inclined to remain in control from here.
Silver probable wave counts are as follows: The metal seems to have terminated a complex corrective wave structure (expanded flat) around $30.00 levels on August 07, 2020. Silver had reversed sharply lower towards $23.44 mark before pulling back.
The above drop might be marked as a lower degree Wave 1. Furthermore, Wave 2 might have also potentially terminated below $29.00 early this week. If the above count holds well, Silver might be underway to produce a Wave 3 lower towards $19.50 levels.
Alternately, it is possible that drop towards $23.44 could be wave 4 and Silver might terminate Wave 5 above $30.00 mark. The above count remains less probable for now. The metal could be poised to push lower below $23.44 and accelerate the drop.
Going by the larger degree wave structure, Silver should ideally unfold 5 waves lower below $11.63 levels in the next several weeks. A break below the trend line support would be hugely constructive for bears to remain in control.
Traders might be preparing to hold short positions taken earlier and look to add further around current levels ($26.50), with protective stops above $30.00 mark and potential target below $11.63 respectively.
Technical Analysis Team
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