Silver is knocking on the breakout door once again

Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities

After a sharp rally from $37 to $54, prices spent the last few weeks building a wide consolidation band between $46 and $54. This range has now turned into a classic cup and handle structure where every dip found support at the 50% retracement near 46 and every rally stalled around 54.

The chart shows that bulls have come back with force. The handle has almost completed and prices are now testing the upper boundary of the range. A sustained close above the USD 54 mark will confirm a fresh breakout. The height of the pattern suggests that silver has room to add roughly eight to nine dollars from the breakout point which opens the path towards levels of $63-64/ounce.

The bigger picture trend remains intact. Higher highs and higher lows indicate steady buying pressure on every correction. As long as prices stay above the $46 support zone, the structure stays strong and dips are likely to get absorbed quickly.

Silver has already shown that it prefers trending moves after periods of rest. The setup once again hints that another leg of the uptrend may be about to begin soon.

Source : Equity Bulls

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Silver PreciousMetals Breakout SAMCOSecurities