By Russell Glaser – A continuation pattern has formed on the silver charts setting up a breakout play to the upside.
The 4-hour chart displays a triangle chart pattern with the ascending leg beginning on the 3rd of November and the descending leg beginning at the all-time price high of silver at $29.34.
Traders should be anticipating a breakout to the upside as this trade would be in line with the direction of the long term trend. However, a breakout lower is also viable but less likely.
To find the expected move following a breakout the base of the triangle is measured. Therefore, we can anticipate a potential move higher of $5 with an approximate target at $32.50.
Patience will be needed as traders should wait for a definitive signal that silver has moved outside of the triangle chart pattern.
A protective stop should be placed inside the triangle to guard against a potential false breakout. The stop can be located below the support at the price of $27 (S1).
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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