Chart of the day: Shanghai silver surges
On Monday, the front-month silver futures contract in Shanghai gapped through the important very long-term resistance at 4,400 yuan per kilogram. Ideally, prices will settle above here on Friday, confirming another important break higher. We feel this is likely because all aspects of the Ichimoku cloud system are bullish and the lagging line has absolutely no obstacles in its way. Added to that, price action since early July can be seen as pennant consolidation – a tall flag pole followed by a triangle. Our first upside target remains at 4,622 yuan, then 4,865 yuan and probably the psychological 5,000 yuan, a conservative measured target from the height of the pennant. Note that this is a powerful and dynamic chart pattern not to be underestimated.
Nicole Elliott is a technical analyst