“Head-and-shoulders” pattern is one of the most reliable trend-reversal patterns.
This is a typical head-and-shoulders pattern that we can see where there are 2 shoulders and a head. There is a neckline that joins them together. The green dotted line length and blue dotted line length are the same length. Base on this length, the we can target (or forecast) where to trend will stop at.
Now if we flip over the chart, we can see an inverted “head-and-shoulders” pattern.
This is the exact opposite of the previous chart. In the earlier chart, the movement is towards down trend and this chart is towards up trend. Again, I want to stress that the green color line length and blue color line length are the same length for us to forecast the price movement.
The reason I’m showing this today is because there is a similar pattern happening in silver price chart:
Looking at the chart and refer to the inverted “head-and-shoulders” pattern, it is suggesting the price might hit the target price which is $ 46 by end of this year. However do note that $ 44 is a resistance that might stop silver price from going there. Well, regardless whether it is hitting $ 46 or $ 44, there is still much more room for silver price to go up in current short to medium term.
If you are interested to learn more about technical analysis and forecast the movement of price, please consider reading this book written by Ikram Adi where he explains one simple and effective formula to forecast silver price movement. Click here to download
Until next time, happy investing silver in Malaysia!