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April 19, 2009

Silver Market Update
by Clive Maund

Originally published April 19th, 2009.

Silver has shown technical deterioration over the past week which is increasing the risk of it aborting the bullish Cup & Handle pattern that we had described in the last update. Specifically it closed below the important support at the mid-March hammer low as a result of Friday`s sharp drop. As we can see on the 1-year chart, it has not yet broken below the important support level shown, so it could still recover from here. However, downside risk is now increasing, especially as gold is also testing crucial support and the dollar is looking set to stage another rally. The falling 200-day moving average is another bearish influence. Failure of the support shown would be expected to lead to a plunge, probably back to the $10 area. Traders may therefore wish to set stops accordingly. Holders of large silver stocks have the option of either closing out or reducing positions, or protecting them with options. The long-term outlook remains positive, particularly as the dollar looks set to roll over after a final rally, as described in the Gold Market update.

Clive Maund,
CliveMaund.com

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maunds opinions are his own, and are not a recommendation or an offer to buy or sell securities. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.