Today we will be taking an in-depth comparison on silver price action between 2015 - 2016 with 2018 - 2019.
Some of the analysis is from the author's point of view and does not represent any recommendation.
Silver 2015 - 2016 daily chart
- Notice the long daily candle anomaly seen late in 2014
- Notice how silver prices recovered but eventually give in to a year long of consolidation lower
- Notice how it found a base late in 2015 and start a remarkable recovery in 2016
Take quick comparison below with the most recent daily chart dated March 5, 2019.
Silver 2018 - 2019 daily chart
- Notice the long daily candle which appears much earlier in mid-2017
- Notice how silver prices recovered meaningfully but stuck in a downtrend rut which lasted for around 12 months
- Notice how silver prices have found a solid base late in 2018 and has completed the first leg higher?
Based on the daily chart, there is enough evidence that technical traders could get excited to buy the dip. But the mentality of the trade will need price action to act as confirmation and betting on repetitive pattern to play out is risky business.
While taking the technical picture into consideration, we have to also assess if the macro fundamental background can support the above claim. So far, these are the following situations where we could see silver running higher again.
- Retail investment start to pick up - we are seeing US Mint running out of silver coins to sell
- Net speculators were mostly absent in 2018 by historical standard and there may be room for them to rebuild long positions aggressively again
- Silver's fundamental is improving - US China trade deal could help downstream demand
Conclusion
Based on this quick analysis, one can assume that the dips in silver price action is another buying opportunity to load up a sizeable long position. That said, there is no guarantee of such repeat and it will depend on individual traders' risk appetite on where to place their stops.
Disclaimer: This material is produced solely by TheBullionTimes and with the best intention of informing readers about the latest outlook on the precious metals industry. Any material in this content must not be reproduced without the consent and any indication are not trading signals as such.