Spot Silver - Daily Candle Chart 20th February 2009

Spot Silver - Daily Candle Chart 20th February 2009

We were wise to be cautious yesterday, as we ended the day with a down bar, which is close to being bearish engulfing ( but not quite!). Given that this is the weekend ( and I have advised the same for spot gold traders ), I would suggest you close out any long positions today, and wait until Monday to re-enter the market. Many traders will be profit taking today ahead of the weekend and squaring their positions, which may lead to a down day today.

As always, spot silver is heavily influenced by spot gold prices which failed to move higher towards the psychological $1000 per ounce target. The recent safe haven rally was news driven, but the flip side is silver also being considered an industrial metal with many applications, so any negative economic data being released tends to hit its upside potential at times. All in all, the odd pullback in a bull run is only natural given some profit taking and is always considered a healthy sign in any up trend. My suggestion for today for intra day traders is small long positions, but with tight stops, should we see any reaction lower ahead of the weekend. Good luck and good trading and see you on Monday.

The short, medium and long term trends are all bullish.

Support:    $13.850 (yesterday’s low)                                   Resistance: $14.940 (high of 13/08/08)

Support:    $13.759 (9 day moving average)                              Resistance: $14.810 (high of 12/08/08)

Support:    $13.530 (low of 17/02/09)                                   Resistance: $14.400 (yesterday’s high)