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Homyk Registered Apr 2011 |
This is my technical analysis of silver for July 2011 using the SLV ETF.
Long time frame 
From the long time frame we see that silver has moved in an exceptionally steep channel for nearly a year. It even overextended this channel but eventually reversed steeply. It recently breached through the major channels inner line after that line having stopped the first fall. If the buyers of the recent spike panics, it might drop even more. The steepness of the current channel looks to be unrealistic and price might also be in the process of finding a new bullish trend that is less steep. Medium time frame 
From the medium time frame we get a better view of the spike and price hitting the inner channel several times. We also see that it breached the major inner channel recently but has climbed back in. If price reacts to the resistance of the inner line again, this will be a great opportunity to get into silver. |
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Anderson167 Registered Apr 2011 |
I`m noticing that you are using a linear Y axis in your chart. This is actually less correct than a logarithmic one, especially in these long time frames. A logarithmic/semi-logarithmic chart will move up the Y-axis in percentage moves and not fixed numbers. This is in line with the human psychology which thinks in terms of percentages when taking profits. I advice you to at least try it out! |
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Homyk Registered Apr 2011 |
Hi, Anderson!
Thanks so much for the heads up on that. I`ve read more up on the subject and I think you`re right. I`ve remade the SLV chart using a logarithmic Y-axis, and although I didn`t hit any more lows with it, I`m sure it`s a more correct chart. I`ll at least draw my next charts using logarithmic scale and see how I feel about the outcome. 
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