Hi Traders! Silver short term forecast update and follow up is here. On April 4th 2023 I shared this “Silver Technical Analysis And Short Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H1 chart, we could see that the price which is moving higher has created a bearish divergence that has formed between the first high that has formed on 30th March 2023 and the second high that has formed on 3rd April 2023 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, we have this bearish divergence on the RSI indicator as well, which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears as well and until the key resistance zone (marked in red) shown in the image below holds my short-term view remains bearish here. A valid breakout below the last low at 23.561 would be the validation for this short-term bearish view.
In Silver based on the above-mentioned analysis, my short-term view was bearish until the key resistance zone (invalidation level) holds. Also, I mentioned that “A valid breakout below the last low at 23.561 would be the validation for this short-term bearish view”. The price action didn’t follow my analysis here, the validation for the bearish view which is a valid breakout below the last low at 23.561 didn’t happen. Alternatively, the price moved higher and we get a valid breakout above the key resistance zone. This is a contradictory sign opposing the bearish view. My current view on Silver is neutral.
So, traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had facts supporting the bearish view here, the price moved higher, and we got a valid breakout above the key resistance zone which we may consider as a fact provided by the market invalidating this bearish view.
When it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This Silver short-term forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
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