Going Short on Silver After the Retrace, at the 50 Daily SMA
Silver retraced higher earlier this week, but we decided to sell the pullback at the 50 SMA
Safe havens have turned bearish on the larger charts, such as the daily one. They used to be really bullish in the last two years and picked up pace further throughout this year, due to the coronavirus and the economic recession in most developed countries.
But, in the second week of August they turned bearish for some reason, despite the global economy heading back to recession as the new coronavirus restrictions and lock-downs increase. In the first week of November we saw a spike higher in safe havens, but the climb stopped around the 50 SMA (yellow) in SILVER .
This moving average turned into resistance last month, pushing the price down. But, September’s low below $ 22 held once again, which means that it has turned into a support zone. Silver bounced off that moving average earlier this week and gained around 250 pips in total.
But, the 50 SMA provided resistance again on the daily chart. Besides that, the price has formed a couple of doji candlesticks, which are bearish reversing signals after the climb. The stochastic indicator is also overbought on this time-frame, which shows that the retrce higher is complete on the daily chart. So, we decided to open a sell forex signal at $ 24.20s, with a 200 pip take profit target above $ 22.s0s above the support and a stop loss above the 50 SMA.
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