- Silver prices are in the throes of a fresh extension of the bearish trend.
- Bears are inspecting the price action closely on the 4-hour time frame.
The price of silver has offered a bearish scenario according to both the weekly and daily time frames which set prospects of a test below the monthly 38.2% Fibonacci retracement.
Should the price remain submerged below the 38.2% Fib, a weekly extension to a 50% mean reversion of the monthly bullish trend puts the $20.65s on the cards.
Meanwhile, the following is a top-down analysis which illustrates a near term trading opportunity in fading the daily correction and targeting a -0.272 Fib level of the correction:
-637398718996406439.png)
If the price holds the 38.2%, then there are bullish prospects.
However, there is room for a further test of the to the downside according to the following analysis:
Weekly chart
-637398729394105472.png)
As can be seen, the price is in the throes of a downside extension of the bearish correction with the price already correcting a significant portion of the impulse.
Additionally, the weekly wick is expected to be filled in on lower time frames.
Daily chart
-637398731507028522.png)
The daily time frame shows that the price has also corrected a recent daily bearish impulse.
The correction is significant enough to expect a downside extension of the impulse in the coming sessions.
The 4-hour time frame offers a trade set-up with a 1:3 risk to reward ratio as follows:
-637398734466891201.png)
As illustrated in the above chart, a sell limit, stop loss and TP market order could be placed with an entry around $23.46 to offer a 1:3 risk to reward when the price breaks towards the next expected support.
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