Silver testing an interesting resistance level

The context of the longer term weekly chart creates a bullish bias for the silver chart, I reckon . This makes a break above the resistance currently being tested on shorter term charts look like a buy set up

Weekly Chart

The longer term silver chart remains within a large descending triangle.

What interests me about the current situation is that price looks close to completing a 3 swing or ABC decline within the triangle. If this is confirmed, it would look like the classic partial pull back that often sets up for an eventual break through triangle resistance.

The fact that the fast stochastic is now heading sharply higher after breaking out of the oversold zone suggests good bullish momentum for this chart.

Silver CFD - Weekly. Source: CMC Tracker

Silver CFD – Weekly. Source: CMC Tracker

Daily Chart

As you can see on the daily chart below, silver is now baulking at the resistance formed by the early January peak.

Given the bullish context of the weekly chart, a break above this resistance looks a reasonable chance of being a continuation of the early stages of a significant up trend.

Silver cash cfd - Daily

Silver cash cfd – Daily

   

Stop Entry Orders

A typical approach to entry strategy would be to buy on a break past Tuesday’s close. The stop entry (S/E) function is a useful tool for this purpose and is shown on the Tracker platform order ticket below.

Tracker Silver order

The order ticket allows you to stipulate a “boundary” if you wish. This puts a limit on the maximum price paid. In this case a market order would be triggered if price rises to 31.70 but will only be filled up to whatever boundary you set (in this case 31.80). In other words you don’t have to risk being caught by gapping markets using stop entry  orders

You can also set your stop loss and take profit orders when the original order is placed. These features mean busy traders  don’t need to be glued to the screen monitoring orders.

I haven’t put a profit level on this ticket. If we get a set up, I’ll post a follow up discussing approaches to profit objectives.

About Ric Spooner

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

2 Responses to Silver testing an interesting resistance level

  1. chas cheong says:

    Ric, my order screen does not ahve a “boundary” option, how do i set this up?

    • Ric Spooner says:

      Hi Chas,

      You can enable boundaries via the preferences button on the toolbar at the bottom right hand side of your Tracker screen

      Boundaries are under the orders tab in preferences. You will see a button which you simply click to enable

      You can also set default parameters for boundaries if you wish. This is a bit further down on this Order tab under the product settings heading. You can select whether you want default boundaries to be in points or as % of the instrument value and also the default size of the boundary. You can always override these default settings manually by putting different values in the order ticket
      Any problems – just send a chat query to our client services team via the help button on the same toolbar

      Cheers
      Ric

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