Resistance Levels in Silver

Silver (and its popular ETF SLV) face a major resistance barrier overhead which should be watched closely.

Let’s update the current Daily Chart of Silver and SLV to note this key price level to watch as a reference.

 

 

Let’s focus most of our attention on the overhead resistance cluster at the $35.00 per ounce level.

On the chart above, we see three major indicators wrapping around the $35.00 area:

• The larger 38.2% Fibonacci Retracement (whole move)
• The smaller 50.05% Fibonacci Retracement (from August high)
• The falling 200 day Simple Moving Average

We can also add in a “Price Polarity” level from the November high and mid-2011 lows.

Does this level guarantee that price will turn and reverse lower?

No, absolutely not, but it will be a level many traders will watch and likely react depending on what happens.

In general, Silver (and SLV below) breaks resistance into bullish territory above the $35.00 level and else remains cautious underneath it.

There’s similar EMA and Fibonacci levels to watch underneath price as support at the $33.00 level.  A breakdown there would trigger (or confirm) a bearish bias into the Sell Zone.

Here’s the same style chart for the companion trading fund SLV:

 

 

While structure is the same, the key barrier level to watch will be $34.00 in SLV.

Price become bullish for a breakout (Green Zone) above $34, develops a sell bias under $32 (Red Zone) and otherwise is neutral/cautious between these areas.

For reference, a firm breakthrough above this resistance area will trigger the start of a Trend Reversal, particularly on a movement back above the falling 200d SMA.

As traders, we must be as objective as possible and rely on key price reference levels to guide our trading decisions.

These levels appear clearly on the chart structure at the moment in Silver (SLV).