Silver reached and exceeded its 5340 downside target on Monday, then rebounded. Investing.com's analysis says the bearish structure has not been repaired, and buyers still face overhead barriers.
Silver hit its measured downside objective near 5340, a level flagged in a note posted on Oct. 22. The metal then bounced, but the analysis argues that the rebound alone does not make a bullish reversal.
Silver rebounds from 5305
The path to the target ran through a breakdown below the orange consolidation, the red triangle's upper boundary, and the July low. Monday's low reached 5305, after which silver climbed back toward 5421 and left a substantial lower shadow on the still-forming daily candle.
Profit-taking by sellers and short covering would hardly be surprising after such a decline, the analysis says. Silver could recover, it adds, but buyers have not yet cleared the levels that matter.
Overhead barriers keep sellers in play
Friday's bearish gap at 5466-5500 remains overhead, along with the broken red triangle boundary and the lower boundary of the black declining channel. Monday's small bullish opening gap at 5394-5419 was also swept intraday, and whether it is confirmed closed depends on the daily close below its lower boundary.
Buyers need to close the 5466-5500 gap and then reclaim the broken triangle and channel boundaries, according to the analysis. The author's conclusion: the rebound is worth watching, but the bearish structure has not been repaired.
Next downside levels
If sellers regain control, the next conditional downside objective is the daily 127.2% Fibonacci extension near 5128.77. Below that, the 5000-5027 area combines the weekly triangle's lower boundary, the psychological 5000 level and a deeper Fibonacci extension.
The analysis adds that silver could rebound before reaching either level. Failure by buyers keeps 5128.77 on the downside radar.
Source: Investing.com
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