KitcoKitco
 

Silver Market Update

 

By Clive Maund

Jul 13 2009 2:59PM
www.clivemaund.com

   

Originally published July 13th, 2009.

Silver has been in a steep intermediate downtrend since early June, but there are signs that this downtrend may soon have run its course, or even have run its course already. On the 1-year chart we can see that having failed to find any serious traction near its 50-day moving average, silver broke lower again towards the important support level shown, which is expected to put a floor under the price, especially as the Cup & Handle formation shown on the chart is a strongly bullish pattern, although it is very possible that its downtrend will end around the current level as it has arrived at the trendline support of a longer-term potential uptrend channel, also shown. As it is becoming increasingly deeply oversold, it is logical to start increasing positions here and especially if it should drop further to approach the support level in the $11.50 - $12 area. However, the importance of this support level means that long positions should be closed out, scaled back or protected with options etc in the event that the price breaks clear below it, as this would be expected to lead to significant further decline.

The COT chart for silver suggests that the time is not yet ripe for a major uptrend to develop or for a serious challenge of the highs to occur. What is therefore likely to happen is that a trading range develops for some weeks and perhaps a month or two between the support and resistance levels shown on the silver chart.

Clive Maund
clivemaund@gmail.com

***

© 2008 Clive Maund. Legal & Disclaimer

for billing & subscription questions: clivemaund@gmail.com for all other inquiries: support@clivemaund.com

The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities.

Mr Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.