SLV Nears Overbought Levels

The SLV is nearing overbought levels as shown in the chart above. Gold is slightly ahead of the SLV in this respect as it has already reached overbought levels.

We can use the SLV price as a proxy to the silver price since they tend to move up and down more or less in sync.

Looking at the chart above, we can see that the SLV is nearing the pink shaded area of the Hurst Bands. The pink band is the warning area that price is nearing an overbought level.

SLV still has a little ways to go before it hits overbought levels, finishing last week at $16.72. The Hurst Bands overbought level currently ranges between $17.17 and $18.27.

MACD is at levels not seen since July 2014, while RSI, at 68.1080, is nearing overbought levels.

The Hurst Oscillator at the bottom of the chart is simply a linear representation of the Hurst Bands seen at the top of the chart.

The next chart seen above is the same chart as the first, only with volume bars added.  At the far right of the volume bars you can see three days of volume above the 50-day moving average. Prices moving higher on strong volume is a bullish indicator.

A final interesting feature of this chart, although perhaps a little difficult to see, is that the SLV price has moved above the blue shaded Keltner Channels. This is an indication of strong upward price momentum.

Taking a look at the weekly chart of the SLV above,  it's apparent SLV has a ways to run before bumping up against overbought levels.

In fact, looking at the blue shaded Keltner Channels again, since August 2013, SLV has spent almost the entire time either within the channels or below them. Given that, expect some significant resistance if the SLV pushes higher around $17.38 (the current top of the Keltner Channels) and $17.86 (the current bottom of the pink shaded Hurst Channels overbought level).

If gold continues to press higher, it is likely that SLV and silver will both do so as well. Although SLV is nearing overbought levels, that doesn't mean that it can't become further overbought.

Bottom Line: Despite being near overbought, the SLV could still press higher. Expect resistance at $17.17, $18.27 and $19.01. Likely near-term support at $15.84 to $16.31 should SLV reverse lower.