Silver, in its hourly chart, shows the reaction in a previous congestion zone between levels of $17.804 and $17.930 per ounce. The lower lows sequence observed in earlier sessions, makes us suspect that Silver could develop a new drop.
According to the Elliott wave perspective, we distinguish a bearish incomplete corrective sequence. The precious metal should start a bearish wave 'c' of Minute degree labeled in black, which could visit fresh lows.
On the other hand, the strength showed by the US Dollar Index (this week gains 0.21%) provides us an additional argument to think in the short-side.
A sell position will trigger if the price closes below $17.753 per ounce. Our conservative scenario foresees the first target at $17.616; if the precious metal extends its drops, the price could test the level $17.494, and even $17.158 per ounce.
The level that invalidates our bearish outlook is placed at $18.064 per ounce.
Finally, the risk of our bearish perspective comes from the latest CFTC report. In the last release, institutional traders informed that they hold 71.85% of long positions. This positioning level makes us suspect that big participants continue looking more upsides in Silver futures.
Trading Plan Summary
Entry Level: $17.753.
Protective Stop: $18.064.
1st Profit Target: $17.616.
2nd Profit Target: $17.494.
3rd Profit Target: $17.158.
Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.
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