This_Guhy

Silver and AGQ Looks like a buy

Long
AMEX:AGQ   ProShares Ultra Silver
Greetings! Precious metals and therefor AGQ look attractive on several time frames for both traders and investors Here is a quick run down of why I am in AGQ as of today (p.s. this isn't financial advise, it is why I do what I do):

Price action just
  • retested previous horizontal resistance as support at 39.5
  • popped below the daily bollinger band and is recovering.
  • retested the 300 daily EMA as support
  • and the 9 seasons rainbow is suggesting we are crazy oversold

This reinforces my notion in the chart below that the flag pole created a falling wedge and we can reasonable suspect to see price action continue its way up the flagpole with this consolidation either bisecting or trisecting the total move. It is nice to see the flagpole hypothesis backed up with lots of bullish divergences as the chart shows below, with a rough target for silver futures .

A broader look at silver futures shows that price action has just completed a consolidation between the 0.5 and 0.382 fib channels levels and if the flagpole performs it gets us into a nowhere land and between the 0.618 and 0.786 retrace level. That is a pretty wide level but, as an optimist, I hope for overperformance.

The volume situation is looking absolutely lovely for blast off. The Volume Profile Visible Range is definitely something that you can use to see whatever you want so I use it with the Average true range (set to log scale here) to help me find an absolute low in volatility to help set the chart. After setting the chart properly I can then look at what price action would be doing. The Value area is set to contain 68% of price action and the fact that price action has found support on top of the value area, by interpretation, suggests we confirmed the first up-leg in this bull market. These are going to be heady times for precious metal bugs as there is a good chance that this move will set up a multi-year consolidation pattern as we see happened between 2004 and 2006 and them massive continuation and with all the quantitative easing going on I would expect a quicker consolidation this time around.

Out of everything in this post what is below is the furthest reach but it is still exciting to see a potential inverted complex head and shoulders on silver futures divided by nasdaq futures . Hell, even if I am wrong and price action just returns to the neckline this is a great chance to buy silver against equities.

The linked idea from yesterday has much of the same analysis as here but on gold . The other linked idea shows where I used a lot of the same patterns I did in this idea to nail the bottom on SPXUSD during the great dip of 2020. I have gotten pretty good at identifying these lows and getting good entries, the problem for me now is holding them closer to investments as opposed to trades. If you follow me you will see I now use the volatility stop and fib channels to help me make sure levels are met, but that isn't applicable to this post yet.
Comment: Silver futures are popping out of the channel and if we can consolidate on top of this formation we should begin to have silver perform to target around 40 as the next area of consolidation/retracement.