Market Overview
After weeks of coiling price action, silver has experienced a significant breakout from a symmetrical triangle pattern that characterized much of February. This movement has reignited bullish sentiment in the market, with the potential for further upside as momentum shifts.
Key Resistance Levels
The $92 zone has emerged as a critical resistance level. Analysts suggest that if silver can break through $92.20 and subsequently $92.88, which aligns with the 50% retracement of the January-February price movement, it could attract more buyers and lead to a retest of the record high of $121.66 set on January 29.
Trading Strategy
For traders looking to enter the market, a break and hold above $92.88 could signal a buying opportunity, with initial targets set at $95.90, $102, and $112.50. These levels have previously acted as minor support or resistance. Additionally, $109.34 is noteworthy as it corresponds with the 78.2% Fibonacci retracement of the January-February high-low move.
For those preferring a more cautious approach, potential entry points may arise on dips towards $86, which represents the 38.2% retracement of the January-February move and the daily high from February 11. The 50-day moving average is also a significant level to monitor; a drop below this could negate the bullish signal from the triangle breakout.
Momentum Indicators
Current momentum indicators, such as the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence), suggest a shift in price momentum. The RSI is trending higher above 50, indicating increasing bullish strength. Meanwhile, the MACD is on the verge of crossing into positive territory, although it has yet to confirm a bullish signal. This indicates that while the bears are losing their grip, caution is still warranted.