For those traders who like to be early in the moves and are willing to take some extra risk for extra rewards, we just found first system confirmations. For the monthly time frame in the silver market our trading model is giving a green light. The green arrow in the monthly chart below illustrates the potential that we see for the long term. Ignition on the monthly time frame – green light.
Silver Monthly Chart – Ignition Point:
Silver in US Dollar, monthly chart as of February 19th, 2020
The last candle in the monthly chart above is not quite finished yet. It shows bullish reversal strength so far. If one waits in trading until all lights are green, price has often moved away from low risk entry zones. The chart shows clearly a most favorable risk reward ratio for the long term player. We have been posting in our telegram channel first long term position building entries.
Silver Weekly Chart – Reversal Pattern:
Silver in US Dollar, weekly chart as of February 19th, 2020
The weekly chart shows prices trading about 1.5 standard deviation from the mean (red dotted line). This allows for prices still being able to advance over the short term and points towards direction to the upside. A reversal pattern with this week taking out last weeks highs, is an additional edge. Even though this is not yet confirmed since the last candle is still printing. A possible inverse head and shoulders formation is in the making. Silver prices bouncing this strongly from the 20 simple moving average (yellow line) alongside with gold´s daily chart being extremely bullish supports our positive conviction. When trading larger time frame setups, we always seek confirmed lower time frame patterns to be mutually in place. Finding this criteria fullfilled here on the weekly chart, allows for first position building entries.
Ignition on the monthly time frame – green light
It isn’t just the timing from a technical analysis aspect that makes us bullish on silver. The fact that its supply is limited but the demand is constant is for the longer term investor an edge not to be ignored. The good news for future silver prices is that there is an overall net bullish factor, largely stemming from new demands in solar photovoltaic systems and many green applications. The inflation rate also affects the price of silver since silver is seen historically as a great hedge against it. In times of high inflationary policies, investors will increase their demand for silver to protect against losses in purchasing power of their fiat holdings. Most of the news focuses on gold as a reserve but central banks across the world buy and sell silver bullion. With gold trading even stronger right now, silver finds itself, classified as a precious metal in a small group of valuable commodities including platinum and palladium, pushed along upwards.This represents an additional edge. In conclusion it should not be missed in ones wealth preservation portfolio.
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