Daily close above 200 day MA, bullish in the near term
A daily close above the 200-day line would indicate strength that could persist in a counter-trend rally. Resistance has been seen around the 200-day line on each of the last two days, so today’s advance is a very small change in character, but it is a change nonetheless. A clearer bullish indication could lead to higher prices and the first sign of that would be a rally above today’s high of 29.88.
If a rally occurs and silver is able to get and stay above the 20-day MA, then the next higher target would be a test of resistance around the 50-day MA (orange). Currently, the 50-day line is at 31.51 and is around the upper downtrend line, which also represents potential resistance.
200 day line needs attention
The 200-day MA has represented trend support since early March this year. Last week there was a daily close below the line on three days, while previously there was none since the 200-day line was reclaimed in early March. Therefore, if a rally is followed by a continuation back down and below the 200-day line, silver will likely be headed for a deeper bearish correction and an extended stay below the 200-day MA.
Nevertheless, the next two lower targets are at 78.6% retracement at 28.27, and the completion of an initial target for a descending ABCD pattern at 27.11 (purple). Note that the start of the ABCD pattern is at the trend high that completed a five-wave Elliott Wave advance at 34.87.
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