Silver Bulls Still Hungry, But Technical Picture Complicated

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Silver seems to have found a new balance around the 21.70 area, recovering somewhat from the 4-month low of 19.88 recorded on March 10. This area has been a thorn in the side of the bulls both in the periods of June-July 2022 and November 2022, where eventually an increase occurs.

At this moment, the silver bulls face strong resistance from the trifecta of the 50% Fibonacci retracement of March 8 – September 1-downtrend and the 50- and 100-day simple moving averages (SMAs) at 22.24-22.30- area

While the recent moves of both the stochastic oscillator and RSI send a bullish message, there are two factors that should perhaps worry the bulls in the market. The Average Directional Movement Index (ADX) is signaling a weakening bullish trend, possibly throwing a spanner in the works for the bulls. Furthermore, the higher high seen in the stochastic oscillator was not matched by a higher high in the silver price action. This is usually an indication of a bearish divergence developing in the market.

If the bulls remain confident, their initial target could come at the busy 22.24-22.30 area. Higher, the 61.8% Fibonacci retracement of 23.35 could trouble them, ahead of the key January 3 high of 24.53.

On the other hand, the bears seem to have a clear path up to the 20.90-21.13 range set by the – 38.2% Fibonacci retracement and the 200-day SMA. Even lower, the May 13, 2022 low at 20.44 could be an area where the bulls could decide to mount their defense.

To conclude, silver bulls are trying to break above a busy area, but there are growing signs not in their favor at this point.

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