Silver Price Might Fall Again

silver bearish pennant 17 Oct 2011

From the daily chart above, silver has formed a bearish pennant. Volume is getting lower and lower as well. For more information on bearish pennant, click here.

This is not looking good for me. It has the possibility that the price will go down lower.

silver possible retracement

Above is the weekly chart of silver, which also showed a bearish pennant in play. However, I added in the Fibonacci which showed the silver price stuck exactly at the 0.382 retracement level. It can’t break past that level for 3 weeks already.

Recently I happened to read up on “Harmonic patterns”, which talks about Fibonacci ratios and how some of these related ratios consistently formed some patterns. A bit “cheem” for me also, I am still learning. However, I can see that it has the possibility to form such “bullish” pattern. The price has to go down first once more before silver will shift to an uptrend again.

As such, silver has the possibility to go down for a 1.13 retracement, which is about USD$25 level.

bullish harmonic trading

If you don’t know what I am talking about, it’s alright. I am just trying to say that silver has the possibility to go down lower and it can go as low as ~$25.

Please note that I am not analyzing on hindsight. I am analyzing at this moment in time which the price is on the extreme right of the chart. This means that I don’t know what will happen in the next few days or 1-2 weeks. I might be wrong (I am always wrong) and who knows silver will just rally and go higher and higher.

But personally, I will go to UOB today (Mon 17/10) and sell my silver away. I feel that there is not much upside at the moment while the downside is a lot more (might drop to US$25). If the price really drop till that level, I will buy back again.

From TA, my own judgement is that it will drop… just don’t know when. It’s the timing that’s difficult to catch. So, I rather sell first (I don’t mean shorting, I mean holding cash) and not buy.

This is just my personal opinion. I am just sharing what I will be doing.

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