SILVER unable to break through key resistance level
Silver (SILVER) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
SILVER ended the week 3.57% higher at 1769.0 after gaining $24.5 (1.4%) today. Trading up to $24.5 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SILVER as at May 22, 2020):
Friday's trading range has been $58.0 (3.33%), that's slightly above the last trading month's daily average range of $56.2. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for SILVER.
After trading as low as 1719.0 during the day, the contract found support at the 200-day moving average at 1724.5. Unable to break through the key technical resistance level at 1774.5 (R1), SILVER closed below it after spiking up to 1777.0 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on Monday, SILVER actually gained 3.12% on the following trading day. After having been unable to move lower than 1726.0 in the prior session, the market found buyers again around the same price level today at 1719.0.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the close-by swing high at 1816.5 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 200" stand out. Its common bullish interpretation has been confirmed for Silver. Out of 18 times, SILVER closed higher 61.11% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.56% with an average market move of 1.27%.
With five out of the other seven Commodity Markets closing lower today, the ones that stand out on the negative side are WHEAT losing -1.36% and COFFEE closing -1.1% lower. On the flipside the best performers have been NATGAS closing 1.5% higher and GOLD gaining 0.46%. Read more