Bullish Divergence Sets Up a Buying Opportunity for Silver!Silver (often traded through SLV/PSLV ETF's) has had a busy week! After getting pumped to 10-month highs on Monday, we saw sellers attack price relentlessly for 2 days. Today, however, was different. Back at old-resistance/(new support?) from 2020 at $24.50-$25 on SLV, we are seeing a basing pattern with hidden bullish divergence on the cumulative volume percentage indicator (lower lows on indicator, higher low on price). This suggests sellers have been more aggressive than buyers, yet price has not dropped further as a result, suggesting there are opportunistic buyers accumulating at these levels. This offers a unique trade opportunity to the long side. If SLV can hold its low of the week (or at least not close a weekly candle below it), it provides reasonable reward-to-risk for a 50-62% retracement towards the highs, and possibly a gap fill. Note how CCMI (or your momentum indicator of choice) is rotating back upwards, approaching the zero-line on the 78min chart (no using hourly charts for indicators on equities or ETF's! Every candle MUST have the same amount of info for indicator readings to be valid!). I expect we see some bullish momentum into the end of the week. Buying a breakout over Wednesday's high or even after a dip under the low that is supported by the daily 50 sma (not pictured, currently at 23.52) makes a LOT of sense.
