Silver price reversal supported by net long positions

London (June 23)  Last week, we witnessed the most dramatic change in speculative positioning in the silver market, which may not have a major impact in the short-term; however, it could highlight a curious relationship between price and positioning that could soon have major implications.

Technically, we can see that prices fell from 41,600-levels in the domestic market, where the upper band of the rising channel coincides. We saw that after taking resistance near the 41,600-levels, prices witnessed a fall towards the 39,400-mark.

 However, prices are currently trading near the lower band support of the mentioned formation, and in Friday’s session, prices have formed a bullish candlestick. This would be considered a bullish engulfing pattern at the end of the session if it gives close above 39,575-levels.

 If prices form a bullish engulfing candlestick pattern near the current levels, then we could say that prices may start heading towards higher levels and going forward, in the coming few sessions, we could see prices testing the 40,500-mark.

HFL

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