Timeframe: W1 Recommendation: Long Position
Entry Level: Long Position @ 19.80
Hedge Level: Stop Sell Order @ 19.00 (Take Profit Level @ 18.25)
Take Profit Zone: 27.30 – 29.80
Stop Loss Level: 19.00 (We will not use a stop loss order to close this trade for a loss and execute this trade as advised below). We do use stop loss orders to protect our profits and close a trade for a profit. Each trader may decide if and where they would like to place the order.
Silver has corrected as visible in this weekly chart (W1). This commodity is now trading at very strong support levels marked by the light blue box in the above chart. We expect silver to stabilize and attempt a rally back up to its resistance level which is marked by the light red box in the above chart. Silver has to breakout from its descending resistance line marked in dark red.
MACD indicates an improvement in momentum and the histogram is trading at its moving average. RSI is trading in oversold territory and a breakout could add buying pressure to silver.
We recommend a long position at 19.80 with a potential second entry level at 18.25. We also recommend a stop sell order at 19.00 with a take profit target of 18.14 in order to hedge our long position and before adding new long positions to this commodity trade.
Traders who wish to exit this commodity trade at a loss are advised to place their stop loss order at 19.00. We will not use a stop loss order and execute this trade as recommended. Place your take profit order at 27.80.
Here are the reasons why we call silver higher:
- Silver is currently trading at very strong support levels
- MACD is showing an improvement in momentum
- RSI is trading in oversold territory
- Profit taking in order to realize trading profits which will start a short-covering rally
- New long positions by institutional swing traders