Be cautious and keep your position size somewhat reasonable as the Silver market could turn around on you rather quickly.
Silver markets have gone back and forth during the trading session on Monday to show signs of hesitancy to move in either direction. That being said, it is worth noting that the Friday candlestick was a hammer sitting right at the crucial $22 level, which offers a significant amount of support. The support extends down to the $21.50 level, so I do think that it is worth paying close attention to this area as it will be crucial as to where we go next.
As long as we can hold this area and continue to find buyers, I think it is only a matter of time before we turn around and reach towards the 50 day EMA above at the $23.04 level. If we were to break above there, it would obviously be very bullish, but you need to pay close attention to the US Dollar Index, because the dollar has offered quite a bit of negative divergence when it comes to the price of silver, and therefore it makes sense that we would continue to see that be the case. If the US dollar cools off a bit, that might allow silver to rally, as that correlation has been very reliable.
That being said, if we were to turn around and take out the lows at the $21.50 level, that could send this market much lower. At that point, I think that silver would probably go looking towards the $20 level, which is crucial on longer-term charts and has caused a lot of noise in the past. To the upside, if we take out the 50 day EMA, then the $23.50 level above would be targeted, and then after that we would probably go looking towards the 200 day EMA which is just above the $24 level.
Keep in mind that the silver markets are also moved upon industrial demand as well as the idea of precious metals, so I think of silver quite a bit more like copper in that sense. That being said, it is much more volatile than both copper and gold, so you need to be very cautious with your position size. I only add to a silver position when I am well into profit. Be cautious and keep your position size somewhat reasonable as the market could turn around on you rather quickly.