Technical outlook:
Silver prices continued to slide and carved a fresh swing low around $21.20 on Tuesday before finding support. The yellow metal is bouncing back strongly and is seen to be trading near the $21.80 mark at this point in writing. Besides, bulls are looking set to produce an Engulfing Bullish candlestick pattern on the daily chart.
Silver has managed to carve a meaningful downswing between $26.22 and $21.20 as seen on the daily chart here. Ideally, prices should produce a counter-trend rally from here pushing through the $23.10 and $24.30-40 levels going forward. Please note that $23.10 is the initial price resistance that the metal would face.
Furthermore the $24.30-40 level is also fibonacci 0.618 retracement of the entire drop between $26.22 and $21.20 levels respectively. A high probability remains for a strong bearish reversal if prices manage to reach there. Also note that the above is past support turned price resistance zone. Watch out for bears coming back into control thereafter.
Trading plan:
Potential rally through $24.40 against $21.00
Good luck!
