Silver Spot Price - Daily Silver Chart 18th May 2009

Silver Spot Price - Daily Silver Chart 18th May 2009

Silver’s schziophrenic personality came to the fore on Friday failing to follow spot gold higher, finishing 7 cents lower but still managing to hold above the $14.00 per ounce price point.  The slide in the price of spot silver can be attributed to the general fall in equities and copper as investors once again worry about the global economy.  Friday was a case of  spot silver prices suffering from their role as an industrial metal.  From a technical perspective Wednesday’s candle was the most significant of the week, closing the day with a two bar reversal and therefore suggesting possible weakness in silver prices in the following days.  The wide spread down bar came as no great surprise following the surge in prices of the last 2 weeks and was almost certainly due to a combination of the market taking a breather and investors taking profits.  Thursday’s candle failed to confirm this bearish sign and the low of the day bounced off the 9 day moving average to reinforce this view, with Friday’s candle once again replicating this price action but finishing the day as an indecisive doji.  Whilst it may be too early to suggest that this midweek bearish signal has been ignored we do need to trade with some caution until the price of silver moves above the $14.35 price point once again at which point we can assume that the bullish tone has once again returned to the market.  With the 9 day moving average providing good support and the 14 day crossed the 40 there is no reason to suppose that this is not the case, and the only area of concern will be as we approach the $14.50 per ounce price mark where we have a resistance area which may temporarily hamper any move higher.  My suggestion for today is as for gold and to look for small long intra-day trading positions aiming for quick profits and keeping your stop loss tight.

The short term trend is bullish, the medium trend is sideways and the long term trend is bullish.

Support:    $13.840 (Friday’s low)                                      Resistance: $14.380 (high of 13/05/09)

Support:    $13.710 (low of 14/05/09)                                   Resistance: $14.350 (high of 12/05/09)

Support:    $13.670 (low of 11/05/09)                                   Resistance: $14.180 (Friday’s high)