Key Takeaways:
- A potential descending ABCD pattern is in play, signaling a bearish continuation.
- Price symmetry completion between the AB and CD legs may lead to a pullback.
- Recent price behavior is short-term bearish, with resistance at the 50-Day MA and a target at 27.31.
- Support can be found at the 200-Day MA at 26.67, along with Fibonacci confluence.
Descending ABCD Pattern in Play
Last week saw a swing high of 29.18, leading to a lower swing low and the formation of a potential descending ABCD pattern. This pattern suggests a bearish continuation, with a drop below last week’s low of 27.69. Once price symmetry is achieved between the AB and CD legs, a pullback becomes more likely. The target of this pattern points to a significant pivot, potentially leading to the next lower support zone.
Recent Price Behavior is Short-term Bearish
If the 27.69 support level fails, the next target is set at 27.31, indicating the completion of the ABCD pattern. Silver also faced resistance at the 50-Day MA during last week’s swing high, confirming the previous support turned resistance trend since August 30. This behavior is typical of a developing bearish trend, with the 27.91 target reinforced by the 78.6% retracement at 27.27. Watch out for the internal uptrend line as possible support on the way down.
200-Day MA at 26.67 Presents Critical Support
Further down, the 200-Day MA at 26.67, along with Fibonacci confluence, forms a critical support zone from 26.81 to 26.67. A successful test of this line could be crucial for the larger silver advance. This pullback presents the first opportunity to test the 200-Day MA as support since the breakout above it on March 4, making it likely to be tested before bullish control is regained.