Silver is edging higher today but continues to hover around the 24.92 level. The bulls have staged another breakout of the December 2022-February 2023 rectangle, breaking the recent series of lower lows and lower highs, but the 7.5% jump in just two days does not appear to have a follow-through.

The momentum indicators are mostly on the bulls’ side at this juncture. The Average Directional Movement Index (ADX) is finally above its 25-threshold and hence pointing to a strong bullish trend in the market. More importantly, the stochastic oscillator has jumped to its overbought area, building a significant gap from its moving average. On the flip side, the RSI is in bullish territory but failing to make a higher high. This could be an early rally-exhaustion sign.

 Should the bulls aim to stage another rally, they would first try to overcome the 78.6% Fibonacci retracement of the March 8, 2022 – September 1, 2022 downtrend at 24.92. The path would then be clear until the January 28, 2011 low and the recent double top pattern’s highs at the 26.12-26.39 range.

On the other hand, the bears are keen on a move back inside the aforementioned rectangle and below the January 3, 2023 high at 24.53. Lower, they could have a go at the March 31, 2021 low at 23.76 and then, most likely, test the support set by the busier 23.45-23.59 range that is defined by the 50- and 100-day simple moving averages (SMAs).

To conclude, silver’s rally appears to have fizzled out despite the fact that the momentum indicators are still supportive of the bulls’ intentions.