Silver might be preparing to reverse lower, after having terminated around $23.25 mark yesterday. After surprising most traders, the metal seems to have finally terminated its corrective wave and bears might be poised to take control back.
Silver probable wave counts are as follows: The metal had earlier dropped from $50.00 through $13.00 levels as an impulse wave. This drop is not seen on the chart view displayed here and it was the first wave within a 3 wave corrective drop.
Ideally, an impulse drop is followed by a corrective rally/wave in the opposite direction. The corrective waves can take various shapes and at times are complex to identify. In this case, Silver unfolded as a 3 wave corrective structure, known as an expanded flat.
Please note that expanded flats are called a traders’ nightmare since they can take out stops on both sides. Wave A of the expanded flat had terminated on July 04, 2016 around $21.00. Wave B, had terminated around $11.64 in March 2020.
The final Wave C of he expanded flat seems to have terminated yesterday around $23.25 levels. Please note that it has sub divided into 5 waves, as an impulse. Since this is the last wave within the expanded flat, we do not expect a corrective wave.
Rather Silver should now unfold into another 5 wave drop and push below $11.64 levels, the March 2020 lows. Most traders might be preparing to initiate fresh short positions around current levels ($22.50), with stops above $23.25 levels respectively.
Technical Analysis Team
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