Silver Price Analysis: Under pressure after six-day winning run
|- Silver's technical indicators like the RSI signal overbought conditions.
- The metal is reporting losses at press time and looks due for a deeper pullback.
Silver is flashing red during Thursday's Asian trading hours, having printed gains for the sixth straight trading day on Wednesday. That was the longest daily winning trend since late December.
The six-day winning run saw the semi-precious metal rise from $15.30 to $17.63. Also, the metal has rallied by 50% over the past two months.
That may cause some investors to think the rally is overdone. Technical indicators like the 14-day relative strength index (RSI) are reporting overbought conditions with an above-70 print. Meanwhile, the 4-hour chart RSI is reporting a bearish divergence, which occurs when an indicator prints lower highs, contradicting higher highs on price. A bearish divergence represents buyer exhaustion and is often followed by a notable price pullback.
The metal may fall to the ascending 5-day average at $17.17. A violation there would expose the psychological support at $17.00 and the hourly chart support at $16.79.
On the higher side, a move above the overnight high of $17.63 would negate the bearish divergence and yield a rally toward $17.80-$18.00. At press time, silver is trading at $17.44 per ounce, representing a 0.60% decline on the day.
Daily chart
Trend: Pullback likely
Technical levels
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