Silver – Daily. Potential Bearish Reversal

Summary

  • A bearish reversal set up will be completed if the next trend peak occurs below the upper Bollinger Band. A typical strategy would be to sell on the first close below the low of the candle making the peak

I’ve posted a couple of these set ups this week and both have so far had a good decline from the entry level ( see EUR:GBP and FMG). This chart looks similar  i.e. a steep rally putting the higher time frame stochastics ( in this case on the weekly chart) well into the overbought zone and so confirming the potential for a significant reversal in this daily chart.

If you are interested in how this set up works, I gave an explanation in the EUR:GBP post earlier this week which you can access below

If we get a set up, I’ll post the strategy as it unfolds

Dave and I can be followed on twitter at DaveCharts and RicCharts respectively. We update the blog with trade ideas regularly and you can receive updates direct to your inbox by subscribing 

Cheers

Ric

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
This entry was posted in Commodity, Market, Trading. Bookmark the permalink.

5 Responses to Silver – Daily. Potential Bearish Reversal

  1. joeldee says:

    If one shorted at the upper BB, did one cover at the 18-21 day moving average? Silver looks to be holding support? If not, where’s the stop suggestion? Without all the details, it looks like backwardization?

    • ricspooner says:

      To get a short set up in this strategy you now need to have a confirmed trend peak occur below (not at) the upper BB
      If you get a set up, the initial stop could be placed just above this peak
      If a new downtrend does emerge then trail the stop down behind new corrective peaks as they occur
      For a fuller explanation of the rationale behind this strategy, have a look at my post on EURGBP
      I hope this helps

  2. Thomas says:

    Hi there Ric,

    Is there still a potential set up in this daily silver chart, as I beleive presently
    ( althought the day is not over ) the peak of the candle has is touching the upper bollinger?
    Tks.

    • ricspooner says:

      Hi Thomas,

      There has been no trend peak since the post and the current candle has now pushed up through the upper Bollinger Band. That means the set up has been negated.

  3. Thomas says:

    Thanks Ric, kindly for the update… that is what I thought was indicated in the explanation for the EURGBP, that the 2nd peak should not go above the upper bollinger. Now watching for the other 2 forex set up to trigger.

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