Silver's Momentum Has Slipped

Source:

"This week's price action will be critical for bears and would-be bulls alike."

Silver's slipping away. . .momentum has slipped.

Prices for the white metal put in a near-term top along with gold as the December Comex contract reached for the $25 level. When failure set in, skid marks were left at $24.95.

By last week, the $23 level was probed by sellers. On Tuesday, prices tumbled through the contract's 10-day moving average at $23.63 and, on Friday, prices bounced off the momentum-defining 21-day average at $22.95.

Along with a fall off from the overbought levels indicated by the Relative Strength Index, a bearish crossover in the MACD indicator also printed last week.

So, get out your pencils and rulers. This week's price action will be critical in establishing objectives for bears and would-be bulls alike.

A close under the 21-day average would likely set up a test of the $21.24$21.37 area, if intermediate support at the Oct. 8 reaction low of $22.35 is taken out. The $21-level objective is defined by the price target of December silver's July 28 pivot point low and a 50% retracement of the contract's August-October rally. Yesterday's resistance has become today's support.

December COMEX Silver
silver's momentum is slipping

For those looking at bearish possibilities underneath the $21 level, keep an eye on December's 50-day moving average, now at $20.88, and more significantly, the $21.50 level, representing a 62% retracement of silver's late summer-to-fall run-up.

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