- Silver has shown itself to be positive yet again during the trading session on Tuesday as it looks like we are threatening the $26 level.
- The $26 level of course is an area that a lot of people have been paying attention to for some time, and it has shown itself to be significant resistance more than once.
- With this being the case, I think you have to look at this through the prism of a market that is ultimately bullish, but it is also a situation where we have seen a lot of volatility and therefore it is a market that you have to be very cautious with.
Technical Analysis
The market has risen significantly during the Tuesday session, but at this point in time I think it takes a certain amount of momentum to break above the $26 level. If we were to break above the $26 level, it opens up the possibility of a move to the $26.50 level, but I think at this point in time you would need to see a huge shift in fundamentals. That being said, the $24.50 level underneath continues to offer support as we had pulled back to that area and then bounced. We have the 50-Day EMA sitting underneath there as well, and it does suggest that there is a significant amount of support underneath that region as well.
Underneath, this is a market that value hunters will continue to buy the dips, but it’s also a situation where the upside is somewhat limited. After all, the $26 level has been like a brick wall, and there has been a significant amount of “paper silver” that has been shorted by not only retail traders, but commercial traders. With that being said, this is a market that I think is limited in its upside, but you can continue to look at this through the prism of finding value occasionally.
Because it is with the overall idea of paying attention to interest rates, central bank actions, and of course geopolitical concerns that you need to trade this market. It’s also worth noting that gold is absolutely on fire at this point, so it is possible that gold could drag this market with it, but it’s got a lot of work to do to take out the $26 level easily.
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