Silver has been bearish since the 21.57 high from July. In August, price came down to rest above the 19.30 level. After a week of consolidation, silver price started show signs of price bottoming, and the latest upswing during the 8/28 session completed this price bottom. The rally also broke above a falling resistance. Price also moved above the 100-, and 50-period SMAs in the 4H chart. The 4H RSI tagged 70, showing bullish momentum in the short-term.
After tagging 19.90, price retreated sharply. While this shows lack of bullish commitment it could also be an opportunity for buyers to scoop up silver at a lower price after a bullish breakout. As price approaches 19.50, and the 4H RSI approaches 40, we should start considering a buy.
Silver (XAG/USD) 4H Chart 8/28
Trade Assessment:
The 50-period SMA is at 19.50. If the price bottom is to stay, we should probably start seeing buyers here, down to the 19.40 area. Let's say we put in an entry at 19.50, we will have to put a stop-loss just below 19.30 ie. 19.20. This would be a stop-loss risk of 0.30. The bullish target could be the 20.15-20.20 area which contains a previous common high in early August, and the 200-period SMA in the 4H chart. This yields a potential gain of 0.65 to 0.70.
The rewrd to risk is thus somewhere between 2:1, 2.5:1.
After tagging 19.90, price retreated sharply. While this shows lack of bullish commitment it could also be an opportunity for buyers to scoop up silver at a lower price after a bullish breakout. As price approaches 19.50, and the 4H RSI approaches 40, we should start considering a buy.
Silver (XAG/USD) 4H Chart 8/28
Trade Assessment:
The 50-period SMA is at 19.50. If the price bottom is to stay, we should probably start seeing buyers here, down to the 19.40 area. Let's say we put in an entry at 19.50, we will have to put a stop-loss just below 19.30 ie. 19.20. This would be a stop-loss risk of 0.30. The bullish target could be the 20.15-20.20 area which contains a previous common high in early August, and the 200-period SMA in the 4H chart. This yields a potential gain of 0.65 to 0.70.
The rewrd to risk is thus somewhere between 2:1, 2.5:1.
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