Silver | Deep Correction | May 5, 2011
(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
5/05/2011 – Silver – Price action on Silver (a daily chart of which is shown) as of Thursday (5/05/2011) has dropped precipitously for five consecutive days from near its $50 area all-time high to hit a low just above $35.
This deep correction follows a steep run-up that was in place since late January. The bearish correction has taken price down to the 61.8% Fibonacci retracement of the last major bullish trend run from the late January low around $26 to the April all-time high just shy of $50.
In the event of a strong breakdown below this key retracement level, the current drop could become more than just a deep correction within the bullish trend. Downside support in the event of this breakdown resides around the $31 price region. An upside trend continuation move could potentially occur if price rebounds and breaks out above $41 resistance.