FX.co ★ Silver Wave analysis for January 09, 2013

Silver Elliott Wave
Since our last update silver has traded upwards like we expected, corrective (C) wave (coloured green) of the bigger (4) wave was developing. Yesterday during the early Asian session we could observe descending movement toward the 30.06 level where this commodity found support and the price started pushing reaching a new daily high at 30.41 level in the European session. Therefore, during the New York session silver continued trading in a bullish mood and reached 30.55 level. At the moment we are approaching 30.96 level, where corrective (4) wave (coloured red) should finish so we need to be prepared for the last downward move in this commodity. In accordance with our wave rules and taking into account that the wave 5 should retrace 161.8% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 28.05 (161.8% of wave 1). To reduce the risk, we can use resistance at 31.50 level as stop loss.

Support and Resistance
(S3) 29.632 (S2) 29.858 (S1) 30.137 (PP) 30.363 (R1) 30.642 (R2) 30.868 (R3) 31.147

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 30.96 with stop loss 31.50 and take profit at 28.05 are recommended.