Silverspot is trading at a new 52-week high and another record high over the last eight years, thanks to Reddit’s WallStreetBets army holding a short squeeze and collaboratively buying the white metal against large institutional funds, trying to reverse position to book some of the early ride gains in the commodity.
The short squeeze has fuelled a massive rally in the silver spot with prices spiking to USD 30.058 per ounce yesterday, well above the previous seven-year high of USD 29.863 seen in August 2020. Furthermore, while silver prices have been under a bull rush over massive buying from retail investors in collaboration, other silver-related products including global silver-backed ETFs, silver stocks across global exchanges are also witnessing large gains over a very short span.
However, with such an unprecedented phenomenon in place leading to such large gains in a relatively small period of time, many industry experts believe that these gains might hold temporary as silver is most likely to continue its trend in tandem with the industry demand.
On the following silver on a daily chart, it could be seen that the commodity has been trailing in an uptrend for quite a while with prices trading well above 50- and 200-day exponential moving averages.
In the recently gained momentum, the silver spot has given a volatility breakout with prices breaching the +2 Standard Deviation of the 20-day simple Bollinger Band®. However, the ability of the commodity to sustain the same could be predictive in nature, especially when the spot is now testing the long-term upward sloping resistance line (red trendline).
A break and price action above the same along with the volatility breakout could further fan bullish sentiments ahead.
Also, it could be seen that the silver spot recently broke above the short-term downward sloping resistance line (green trendline) and is currently circulating above the same.
The major and decisive resistance for the commodity is at the -2 Standard Deviation of the 20-day simple Bollinger Band®, which is overlapping with the long-term upward sloping support line (yellow trendline) and 200-day EMA.
A break and price action below the same could once again turntables for the commodity while seeding bearish sentiments ahead.
On following the set of directional indexes, it could be seen that plus DI has suddenly sloped up, crossing the minus DI from below, suggesting a support point of USD 24.700. However, the sudden shift in the direction of plus DI is mainly due to the upside volatility seen over the past few trading sessions rather than the underlying trend.
The same could further be confirmed by witnessing only a minor slope in ADX, suggesting that major volatility over the past 14 days has been mainly towards the downside. The same could also be confirmed by witnessing many bars near the -2 Standard Deviation. Research by StraitsResearch
ASX Price at posting:
$72.23 Sentiment: Sell Disclosure: Not Held
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