"At the beginning of this month, silver finally broke above $40 per ounce. Since then, it hasn't looked back. Overnight, it briefly broke above $47 to hit its highest level since May 2011, just as it was coming off its all-time high around $50. Silver has gained over 17% in September so far. But, as with gold, its daily MACD shows that it is very overbought."
"Traders should be prepared for a significant pullback. But timing such a move is incredibly difficult, and there's nothing in the rules (because there are no rules) that says silver can't rally further and become even more overbought. There's no doubt that, after a very slow start, silver is finally playing catch-up with gold. And it could be that silver's rally has further to run, once it puts in a decent correction, thereby giving the daily MACD an opportunity to reset."
Silver broke above $40 per ounce at the beginning of the month and has since accelerated, briefly topping $47 overnight and nearing its all-time high near $50. The metal has gained over 17% in September, reversing a slow start and beginning to catch up with gold. The daily MACD indicates silver is very overbought, increasing the probability of a significant pullback. Timing a correction is difficult because there are no fixed rules preventing further rallies that increase overbought conditions. A decent correction would allow the daily MACD to reset and could set the stage for additional upside afterward.
Read at London Business News | Londonlovesbusiness.com
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