Silver has been consolidating in November since falling to a fresh low on the year at 15.05 as we can see on the 4H chart. It has since built a price bottom when it rallied above the 15.90 resistance pivot. It has since showed loss of bearish bias as price started to hold above the broken resistance as support, and above the 100-, and 50-period SMAs as support as well. The RSI has pushed above 60, which shows loss of bearish momentum.
The 4H chart shows that price is sin another consolidation range above the 15.90 resistance turned support. However, price seems to be pushing above this range, threatening to push above the 200-period SMA as well. We know that before November, price has been bearish and making new lows on the year. So, if we get another bullish push, where is the next key resistance?
Key Resistance: When we look at the daily chart, we can see that the next key resistance is around the 17.00 psychological level. It is reinforced by a falling trendline coming down from the 21.57 July high. There is a previous support pivot here, and the 50-day SMA resides around here as well. If price stalls around 17 and the daily RSI stalls around 60, get ready for a bearish continuation attempt.
(click to enlarge)
Bearish Continuation Test:
The first stop down that might test the resolve of the bears will be in the 15.80-16.00 area. Below that, price is likely to test the 15.00-15.05 low with risk of falling lower in continuation of the prevailing downtrend which remains intact if price remains below the 17.00 handle.
Shifting to a Sideways Market:
If price breaks above 17.00, we are likely going to enter a significant period of consolidation, or a medium-term sideways market with upside risk toward 18.50-19.00. This is likely going to be choppy, so there will be dips as well, but if price did break above 17.00, we should keep the bearish outlook limited to 15.80-16.00 giving it a more likelihood to hold because the prevailing downtrend would have been violated.
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