- October 8, 2022
- Posted by: Tradingshot Articles
- Category: Commodities
Silver (XAGUSD) has been pulling back in the last 3 days following an impressive +18% rise since the September 28 Low. As you see, we’ve charted Silver’s pattern since February 01 2021, which is a Channel Down, most effectively viewed using the Fibonacci channel levels. This is basically the pattern we used to analyze the metal almost a month ago, and it helped us call accurately that bullish break-out:
After breaking above the 1D MA50 (blue trend-line), the price didn’t reach as high as the 1D MA200 (orange trend-line) but it did hit the 0.786 Fibonacci retracement level, which is the level that the October 2021 rise topped (on November 12 2021) and got rejected back to the 0.236 Fibonacci a month later. The similarities between the two fractals are obvious even between their 1D RSI sequences where are you see, based on the symmetry, Silver might have made a peak similar to that of November 12 2021.
If the price continues to replicate the 2021 pattern, then we can target the 0.236 Fib again. The ideal confirmation will be given once the 1D MA50 breaks again. So trade this in accordance to your tolerance levels. The lowest risk buy would be exactly on the 0.236 Fib.
On the bull side, the above strategy is invalidated if the price breaks and closes above the 1D MA200 first. In that case, we can start buying again and target the 1.382 Fibonacci extension which was reached in March 2022 at the height of the Ukraine – Russia war.