Silver Chart - Daily Candle Chart 6th April Spot Silver Prices

Recent stock market rallies and over optimistic investor sentiment has sent both the price of gold and silver prices lower.  Silver closed sharply lower both on the day and the week with a wide spread down bar closing 28 cents to settle at $12.710/ounce and with all three moving averages pointing lower.  From a technical perspective both the 9 and 14 day moving averages crossed below the 40 giving us a strong bearish signal.

With silver prices this morning having broken through the support level at $12.65 this is now adding to the bearish tone and there is little in the way of immediate support to prevent a further fall in the price of silver, possibly even as low as $11.37.  Whilst this is indeed a possibility the reaction lower will, to a large extent, be dictated by movements in the equities market, as even though silver is classified as an industrial metal it does have this dual role as a safe haven status along with gold, and therefore any reaction lower in the stock markets should have a consequent effect on silver.  In many ways silver is a more complex commodity to trade than gold as it combines these dual paradigms making both technical and fundamental analysis more an art than a science.

My suggestion for today’s trading is to look for small short positions using the intra day hourly chart to sell into the market on any up bars, and in particular look for shooting star candles, doji candles or evening star reversals.  I would suggest you place any stop loss above the $13.37 region and either take profits early, or lock in profits with a trailing stop loss, as I believe, in due course,  that in the longer term spot silver prices will continue the bullish momentum of February.

The short term trend is sideways while medium and long term trends are bullish.

Support:    $12.710 (Friday’s low)                                          Resistance: $13.360 (high of 30/03/09)

Support:    $12.600 (low of 31/03/09)                                   Resistance: $13.257 (high of 31/03/09)

Support:    $12.490 (low of 11/03/09)                                   Resistance: $13.010 (Friday’s high)