Patrick MontesDeOca, CEO of the Equity Management Academy, today recommended that short traders take profits and get back on the long side of the silver market.
In a February 10 Equity Management Academy report, “Silver Fibonacci Intermediate Targets Completed,” MontesDeOca discussed the more than $2 rally since December. The report said that if the market fell below $17.80 for the week, we would be looking for a correction. He said, “It’s an example of harmonic timing with all the daily and weekly indicators aligning. There’s a high probability that when prices reach these levels, traders should take profits.” He said that there is a “significant potential for a correction,” which, he said, will test the $17.59 level, with $17.47 the lower-level target.
Where are we now?
Today, March 7, the low was $17.4950. MontesDeOca said, “We’ve seen…as expected on February 10 the correction coming down to the $17.59 to $17.47 area.” The market ran up to above the Fibonacci trend line of $18.29. Although the market has given a short-term buy signal, MontesDeOca said, “The market pretty much caved in to that resistance and came down on the second of March to test the lower levels of support where we are today: testing $17.4950.”
Where are we going from here?
“The market appears to have made some kind of a descending wedge right into the Fibonacci trend lines of support,” MontesDeOca said. It is a continuation pattern, just as occurred back in January. He believes that the market is consolidating “before the market continues its upward trend.” Descending wedges are bullish.
“If the market closes above $17.85,” MontesDeOca said, “it will break out of the wedge,” and we will be looking for targets as high as $18.65 all the way up to $19.01. He believes this is the high that will be achieved before the usual seasonal drop in the first or second quarter. “The market is stabbing right into a harmonic level of support at $17.67 down to $17.10. It’s the best time to take profits on shorts and get back on the long side.” He is anticipating a reversion to the mean to take the market back to $18.86 and $19.00.
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