Bearish Pennant on Daily Chart — Bad News for Silver

A bearish pennant has formed on a daily chart of silver. The pattern occurs when prices enter a period of consolidation after a sharp move down. It is usually followed by further decline, thus the name “bearish.” The technical analysis is in line with fundamentals, which are mostly negative for metals due to the outlook for an interest rate hike from the Federal Reserve in the near future.

On the present chart, the pattern is shown by the yellow lines. If prices indeed break to the downside, the cyan line offers an entry point for short positions. The green line shows a profit-taking objective.

The previous pennant pattern (that time it was a bullish one on a weekly chart) did not predict price moves correctly as the commodity continued to go lower after the period of sideways move.

Click the image to enlarge it to a full-size screenshot:

The chart was built using the ChannelPattern script. You can download a MetaTrader 4 chart template for this silver pattern. You can also trade it using the free Chart Pattern Helper EA.

If you have any questions or comments regarding this bearish pennant pattern on silver chart, please feel free to submit them via the form below.