Technical overview of the instrument SILVER, Regression channels system for January 28, 2011

4-hour timeframe
Technical data:
Head channel of the linear regression: direction –up
Low channel of the linear regression: direction – down
Moving average (20; smoothed) – down
CCI: -86.1244

Silver, just as gold, is currently in the downside movement, which is able to reverse the uptrend down; there are no signs of completed downside movement though. Head channel is directed upwards, which indicates continuing (yet) uptrend in the long term. Low channel is directed downwards, which indicates the continuation of the correction movement in the short run. The moving average is directed down; the price in its turn is below it, which shows continuing downside movement. Low channel that reversed down implies that the correction might extend or turn to a downtrend. Therefore, it is recommended to trade down with a target at 26.56. In case the price overcomes the level “2/8”, the next target will be the level «1/8» – 25.78. Upside movement will only start after the price fixates above the moving. If the price fixates above the moving average, it is recommended to cut short positions. CCI is near the -100 level, which indicates slight overbought.

The closest support levels:
S1 – 26.56
S2 – 25.78
S3 – 25.00


The closest resistance levels:
R1 – 27.34
R2 – 28.13
R3 – 28.91

Trading recommendations:
At the moment we observe the continuing downside movement. The price is between targeted to the 26.56 level. If this level is passed, the downside movement will continue with a target at 25.78. For up trading it is recommended to wait until the price fixes above the moving. Stop loss should be placed above the moving or the closest Murray level.
In addition to technical image, one should take into account the fundamental data and the time of their release.

The chart annotation:
Head channel of the linear regression –uni-directional moving blue lines.
Low channel of the linear regression – uni-directional moving purple lines.
CCI – blue line in the indicator’s window.
Moving average (20; smoothed) – blue line on the price chart.
Murray’s levels – multi-colored horizontal lines.


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