Timeframe: W1 Recommendation: Long Position
Entry Level: Long Position @ 19.80
Hedge Level: Sell Stop 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 once again trading at strong support levels marked by the light blue box in the above chart. Our first silver position was closed for a profit as our stop loss order was triggered as this commodity has returned back to support. We expect silver to attempt another breakout rally over the next few weeks and recommend traders to re-enter this commodity trade.
MACD has formed a positive divergence which is a bullish signal as the histogram as well as moving average are approaching the centerline. RSI is trading in oversold territory and a breakout should further fuel the rally while it has also formed a positive divergence.
We recommend a long position at 19.80 with a potential second entry level at 18.25. We also recommend a sell stop order at 19.00 with a take profit target of 18.25 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 has formed a positive divergence which is a bullish sign
- RSI is trading in oversold territory and formed a positive divergence of its own
- Profit taking in order to realize trading profits which will start a short-covering rally
- New long positions by institutional swing traders
Open your PaxForex Trading Account now and add this commodity to your commodity portfolio.
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