Silver at a Crossroads: Head and Shoulders Pattern on the Horizon?

In today’s technical analysis, let’s focus on Silver, which has been moving sideways over the past few days, forming a potential head and shoulders pattern. The left shoulder emerged around August 20th, the top of the head formed on August 26th, and it appears we have the top of the right shoulder as of yesterday. This setup is currently at a critical juncture with two key supports in play.

The first key support is the neckline, a crucial component of any head and shoulders pattern, marked with black lines on the chart. As long as the price remains above this neckline, the head and shoulders pattern is not yet confirmed, and the bearish scenario is not active. The second support is the green uptrend line. A break below both the green uptrend line and the black neckline would trigger a strong sell signal, activating the head and shoulders pattern and indicating a bearish move.

However, if the price bounces off these two support levels and moves toward new local highs, it would invalidate the head and shoulders pattern and suggest a bullish outlook. In this case, the failed bearish formation would provide a potential buying opportunity. We’ll need to watch these key levels closely to see which direction Silver takes.

Source: https://www.axiory.com/analytics/technical-analysis/silver-at-a-crossroads-head-and-shoulders-pattern