Silver Price Analysis: Bears about to take back control?
|- Silver is struggling to convince on the upside and could be in the throes of a healthy correction.
- The weekly chart offers a compelling downside case from an overextended W-formation.
The price of silver has been in the hands of the bulls for the past few months as it corrects the correction of the strong monthly rally.
The following is a top-down analysis that illustrates where the next swing trading opportunity could arise from resistance and targeting a key confluence level on the weekly and daily charts.
Monthly chart
The monthly chart shows a W-formation that, at some point, will require a correction that would be expected to reach at least a 38.2% Fibonacci retracement level.
There could still be a continuation, although the weekly chart is showing more overextended signs of market structure.
Weekly chart
The weekly chart is a showing an overextended W-formation which would be expected to lead to a downside correction towards the prior highs of the pattern that meets the 38.2% Fibonacci retracement level.
Daily chart
The price has seen a strong rejection from resistance and could lead to a significant downside correction.
4-hour chart
A restest of the current support and failure will raise a higher probability of a downside correction to the W-formation's structure and the confluence of a 50% mean reversion of the latest daily bullish impulse.
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