Silver's Season to Rally

The chart picture in silver, is way stronger that that of gold. In my previous posts I have made mention of the strong seasonal upward price tendency that silver displays at this time of year. Even in the face of falling gold at times.

Like gold, silver is now very overbought. Since the January 8th low of $12.095, March Silver has rallied over $1.50 or nearly 12 percent in price. That is a large amount.

Like gold, silver is in an Uptrend. Prices continue to make higher highs and higher lows. Like gold, silver is overbought and is need of either a price correction or price consolidation. Unlike gold, silver has a strong seasonal tendency to remain strong into March.

As long as prices don't get back under the most recent break low, $13.095 which occurred on January 24th, showing the overbought status of this market, silver remains a buy. Given the current chart formation, wait for Stochastics to either embed or correct. Embedded Stochastics occur when both the red "K" line and yellow "D" line stay over an 80 reading for 3-days in a row. As you can see on the chart below, that is not the case. This market is simply overbought at this time and will most likely begin to correct downwards or go sideways within days at the most.


From Inside Futures: "March Silver continue to surge with a 21.7 cent gain on the day to settle at $13.49. The day's range was $13.244 to $13.594. Silver bulls met sellers as the Gold market turned downward midway through the session, spurning spillover selling across the aisle at the COMEX. 2007 has brought increased volatility to the Silver market with this year's range being $12.099 to today's high of 13.594, or $1.495 per ounce, low to high. Bulls not point to $14 as the next target. Momentum still points to higher prices as bulls remain in control despite the sharp sell-off after posting today's new yearly high. Support basis March comes in at today's low of $13.40, followed by the lower end of the break-away gap at $13.315. Resistance is pegged at today's high of $13.594, followed by the $13.64 and $13.95 respectively. "