Silver breaks higher - here are the levels to watch
(Kitco News) - Silver has broken out of a strong resistance level at $26.71/oz during Monday's session. The resistance was used at least six times on the four-hour chart below alone and took some strength to pass. As you can see from the bottom there was lots of volume on the breakout which confirms the validity of the break.
This now makes the chart have another consecutive higher high and higher low waves since the low of $23.74.oz was noted on 30th March. The move was an interesting one as the price had been hanging around the psychological $26/oz area for a very long time and the directional break of the consolidation would give us a great clue to the future path of the precious metal.
Now the price has moved into the higher distribution area between $26.71 and $28.42/oz the next mean value area stands at $27/oz. This is where most contracts have been traded in that range but there is another sticky level at $27.54/oz to watch out for.
On the topside, the next major resistance is holding at the purple horizontal line at $28.42/oz and then beyond that the high of the chart at $30.35. On the downside, previous resistance at $26.71/oz is now the support zone to watch followed by the aforementioned $26/oz area.
For now, the bulls are clearly back in charge and when the U.S. trades come back to the market it will be interesting to see if higher levels can be tested in the afternoon.