FX.co ★ Silver Wave Analysis for January 14, 2013

Silver Elliott Wave
Since our last analysis silver has traded downward like we expected, impulsive (1) wave (coloured green) of the bigger (5) wave (coloured red) has developed. During the Friday's European session we could observe descending movement toward the 30.13 level and we can consider this move as the end of the (1) impulsive wave (coloured green). Therefore, during the New York session this commodity did not manage to hold this level and the price retraced back to the 30.68 level. At the moment we are at the end of the corrective wave (2) (coloured green) and we expect to see the price below 29.50 level this week. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 29.47 (161.8% of wave 1). To reduce the risk, we can use start of the 1 wave at 30.93 level as stop loss.

Support and Resistance
(S3) 29.290 (S2) 29.720 (S1) 30.080 (PP) 30.510 (R1) 30.870 (R2) 31.300 (R3) 31.660

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 30.46 with stop loss 30.93 and take profit at 29.47 are recommended.