Gold and silver both had breakout setups today. Gold was a little easier to identify, as Thursday was a doji bar. Both had an NR4 day Thursday-the narrowest range of the previous four sessions. This is a time when it’s nice to automate chart scanning, as it wasn’t easy to spot on the chart.We had good moves in these markets, let’s look at silver.
(Information in this report is from my Trade or Fade service; for information and to sign up for a free trial, go here.)
Below is the daily silver chart.I calculate breakout levels with my Trade or Fade service; if you didn’t get ToF but wanted to look for breakout points, Wednesday’s high at 12.47 could have been used, I might have fudged that just over “round number” resistance at 12.50. The down trend line also gave a breakout point.I put the Fibonacci retracements on this chart to give some potential rally targets.
The daily ToF report for silver is below.This report was sent out last night, shortly after the night session opened. I calculate the support and resistance levels from the session open, which is the pivot price on the report. The two breakout points were 12.571 to the upside and 12.159 down.
A 10 minute chart for May silver futures is below.I drew the trendline over the overnight activity to show the slow decline overnight; I thought that was interesting. I just missed this on the chart, but the previous intraday high was 12.555, so a rally through R-1 would also be breaking through that old high-the kind of thing we look for with breakout trading.
Silver traded through R-1 about 7:30, stop losses could have been placed below the old session high; I used the low of the entry bar at 12.500 for stops.It consolidated for a bit then quickly ran to the first profit objective at R-2, or 12.776, for about a 20 cent move in about 30 minutes.If you were looking for a bigger profit objective, the Fibonacci retracement level at 12.888 is resistance, and the final ToF objective at R-3 is 13.054 is next.
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