- Silver slides after unlocking an almost 12-year high
- Technical signals suggest rally is overstretched
Silver made some big waves on Friday, and it even found fresh buying interest to run up to 34.25 on Monday – its highest point in nearly twelve years. But now it seems like the bulls might need to catch their breath for a bit.
With the price closing above the upper Bollinger band and the stochastic oscillator flagging overbought conditions, a little pause might be on the horizon.
If not immediately, the bulls could lose pace slightly higher and near the 2022 resistance line at 35.00, where the 61.8% Fibonacci retracement from the 2011-2016 downtrend is sitting. The next obstacle could emerge near 36.25, a break of which could see a continuation towards 37.40 last seen in February 2012.
On the flip side, if downside pressures push the price below 33.00, support could initially develop near 32.50, just ahead of the 20-day simple moving average (SMA) at 31.78. If things really take a turn for the worse and we close under that critical 30.65-31.50 zone – where the 50% Fibonacci retracement is placed –it could upset traders, especially if 30.25 doesn’t hold either. In that case, we might be looking at prices slipping down to the 28.35-28.85 range.
In a nutshell, it seems like silver could be running out of steam soon, if not immediately then possibly somewhere between 35.00 and 36.25.
