Trading Spot Silver

Research Notes January 2026 > https://www.unum.capital/post/rjan2026

Trade Local & Global Financial Markets with Unum Capital.

To get started, email tradingdesk@unum.co.za

Date: 10 January 2025

• Primary Category: Parabolic Breakout / Discovery Phase 🔵

• Expected Path: Mean Reversion toward $70.00 Base ⚪

• Strategic Overlay: Avoid Chasing / Accumulate on Structural Pullbacks 🟡

Highlights: Spot Silver

• Fractal Momentum Surge: A unified "Momentum Trinity" is firmly established as of early January 2026. Spot prices have surged over 160% in the last year, with momentum indicators on Daily, Weekly, and Monthly charts simultaneously pinned in extreme Overbought tiers. This synchronization reflects a total market consensus driven by a structural mismatch between tightening physical supply and inelastic industrial demand.

• Cyclical Turnaround: After shattering a decade-long ceiling in the $30–$50 region during 2025, silver has transitioned into a secular price-discovery phase. Unlike assets making minor highs, silver is now being viewed as a "strategic cornerstone" for 2026 portfolios due to its role as a critical industrial conductor.

• Daily Overheat Warning: The Daily chart is flagging immediate tactical exhaustion in the Short Term (approx. 1 to 10 days). Following a peak at $85.87 in late December, the price underwent a violent nominal decline, recently oscillating around $78.00–$80.00. This volatility signals a "cooling off" period is necessary to reset speculative gauges near the 8-day EMA.

• The Weekly "Engine Room": The Weekly chart remains the primary bullish engine, with all trend timeframes sloping aggressively upward. The 14-week Base Term has successfully reclaimed structural ground, confirming that the Medium Term (approx. 2 to 4 weeks) trend has shifted from range-bound to a sustained bullish regime.

• Breakout at Resistance: Price action is currently challenging major psychological resistance at the $80.00 mark. A definitive monthly close above this pivot would technically confirm a massive secular turnaround, unlocking long-term Fibonacci extension targets toward $100.00 throughout 2026.

Best Action Timeline:

• 3 to 5 days (1 week): Wait / Trim. Immediate upside momentum is meeting stiff technical resistance. Expect choppy price action or a minor pullback to test initial support between $75.00 and $77.00.

• 6 to 10 days (2 weeks): Accumulate. Once the short-term overextension state cools in the Medium Term (approx. 2 to 4 weeks), look for high-conviction entries near the 75-day EMA / 21-week EMA structural floors (currently targeted near $70.00–$72.00).

• 11 to 15 days (3 weeks): Ride the Trend. If the $70.00 "line in the sand" holds as support, aligned weekly momentum should drive the next impulsive leg higher toward $88.00.

• 16 to 20 days (4 weeks): Monitor Monthly Close. A monthly close sustained above $80.00 confirms the secular discovery is active for the Long Term (approx. 5 to 8 weeks).

Scenarios:

• 🟢 Bullish Scenario: Blue Sky Extension: Price ignores technical overextension and blows through $83.00 resistance toward $90.00+, driven by a worsening physical supply squeeze in major hubs like Shanghai and Dubai.

• ⚪ Base Scenario: Bull Flag Consolidation: The metal digests its massive annual gains, consolidating between $72.00 and $80.00 to allow the 8-week moving average to catch up while industrial demand remains an anchor.

• 🔴 Bearish Scenario: Momentum Failure: A sharp rejection at recent highs triggers a deleveraging event back to the 50-week EMA / 200-day SMA base near $65.00, signaling a tactical "blow-off top" before a deeper macro reset.

Key Actionable Zones

• Immediate Resistance: $81.50 – $83.00 (Current All-Time High / Climax Zone).

• Targets: $88.00 – $100.00

• Pivot Support: $75.00 (Immediate Structural Floor).

• Critical Structural Support: 75-day EMA / 21-week EMA (Medium-term "Buy Zone").

• Trend Floor: $54.20 – $65.00 (50-week EMA / 200-day SMA Base).

Core Thesis Spot Silver is an "early-stage secular discovery" play. While short-term indicators are flashing extreme warnings, the long-term structure is emerging from a 13-year base, offering an asymmetric commodity opportunity. Tactical patience is required to avoid buying the immediate peaks; wait for the structural dip to the $70.00 pivot, then trust the weekly trend.

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Trading Notes/Resources (Where Applicable)

READY TO TRADE: ACTIONABLE AREAS: For active traders who look to generate cash flow on a continuous basis, determining the ‘next best probability’ level to execute against may be of immense value. The blue and red horizontal lines on the chart represent a next best probability buy re-entry range and a next best probability sell re-entry range over the short term. The ranges assume no existing position being held by a trader while the probabilities are based on several factors which may include: short term rating, medium term regime, momentum, horizontal or diagonal support/resistance, candle structure, moving averages and standard deviation, among others. These are short term levels and may be in contrast to medium and long term outlooks which are based on the weekly and monthly charts and, which may be applicable to long term investors. These levels are subject to change based on sentiment, the subsequent price action and company/sector specific or macro news flow. As always, while the levels are outlined, traders should be prepared to adjust in real-time based on the aforementioned.

"Strategy Alerts" help clients identify trading opportunities. When a ticker's real-time or pre-market price action aligns with the criteria on a slide—such as a pullback to the 21-day EMA or a breakout from a consolidation base—it effectively "matches" that stock to the strategy, triggering an alert to a potential trading opportunity. This approach transforms the playbook into a dynamic scanning tool, allowing you to instantly categorize active stocks by the specific technical thesis playing out, ensuring that every trading potential opportunity communicated is backed by a predefined, actionable setup.

THE TACTICAL TRADING GUIDE (PRICE ACTION MODEL): UNCOVER OPPORTUNITIES & ASSESS REWARD-TO-RISK

• It helps helps clients determine and shed light on the some of the following:

• The CURRENT TECHNICAL POSITION and a PRICE ACTION PROBABILITY for multiple time frames.

• Three (3) ‘trading’ time frames are considered: Short Term (1 to 10 days) / Medium Term (2 to 4 weeks) and Long Term (5 to 8 weeks)

• Whether the reward-to-risk is attractive for a buy/long position

• Whether a share is weak. In this case, wait until the price stabilizes before looking to enter (i.e. want until it stops going down)

• Whether aggressive buying is underway. In this case, do not ‘chase’ (do not buy) but instead wait for a pullback to re-enter a buy or an overextension with deteriorating candle structure to sell/short.

• Whether a trader can look to buy a pullback into a key moving average (continuation trade)

• Whether a share needs to break a range for a new trend to be determined (bullish or bearish)

• Whether a traders needs to monitor for a change of character that could lead to a bullish or bearish reversal

• Whether a share could start a consolidation phase or before continuing it’s bullish or bearish trend

• Whether the upward momentum is slowing (if it's in a bullish phase)

• Whether buyers can look to 'phase in' to a position (if it's in a bearish phase)

• Whether a share lacks directional bias.

• The data set is available in real-time (on request)

• The readings are subject to change as the price action develops.

TRADING TIP # 1 Let The Candle Confirm 

Out of all those available, Candlestick Charts are the most widely used when it comes to analyzing price from a technical perspective. The interpretation thereof helps traders to understand the interaction between market participants and informs who is in control between buyers and sellers. Various types of candle formation convey key information about the range of outcomes for a share for example, following a downward trend, a long lower tail, doji, piercing or bullish engulfing suggests that buyers have started to become active/started to take an interest while following an upward trend, a long upper tail, doji, dark cloud cover or bearish engulfing suggests that sellers have started to become active/started to take an interest. While information is conveyed pre-market, it is the intraday price action that will confirm any trade or opportunity. While we have a plan, we are also ready to switch gears as the price action develops.

TRADING TIP # 2: Failure & Reclaim

FAILURE to hold a prior session high/range high may signal that the upside momentum is slowing and that an opportunity to short/sell may be at hand. This is often reflected via a deteriorating candle structure which suggests that sellers are starting to take control. Examples of such candles are long upper tails, doji's, dark cloud covers, bearish engulfing candles etc. RECLAIMING a prior session low/range may signal that the downside momentum is slowing and that an opportunity to buy may be at hand. This is often reflected via a improving candle structure which suggests that buyers have started to enter and are looking to take control of the price action. Examples of such candles are long lower tails, doji's, piercing candles, bullish engulfing candles etc.

TRADING TIP # 3: Take Note of the 'Igniting Bar' 

This is a large green or red candle which suggests that traders should: TAKE NOTE note of the change in characters and potential change of the trend. TAKE NOTE of a potential acceleration of the trend. TAKE NOTE of potentially aggressive buy or selling Often, BIG MOVES start with BIG MOVES.

Core Trading Principles: Short and Medium Term

1. Trade with the primary trend.

2. Volume Matters. This represents the interest of large institutional investors who have the ability to move a share, both up and down.

3. Do not short/sell a share that is above, and in close proximity to it’s rising 8 and 21-day moving averages. This trend can persist for an extended period.

4. Ultra short term traders, if a share has advanced strongly over a 3-7 day period, book profits. You can always re-enter and do the same trade at lower levels.

5. If a share is printing a large bullish (green) candlestick following an extended move, use the strength to sell. The likelihood that the share retraces is high.

6. If a share is printing a large bearish (red) candlestick following an extended move to the downside, use the weakness to start a long position. The likelihood that the share rebounds is high.

7. Trade in the direction of the 20-day moving average, using the MA as a level to enter as well as a hard break thereof as a trailing stop-loss.

8. The 8 and 21-day moving averages often act as support and resistance levels. When they are turning down, use them as levels to sell into. The opposite applies when they are turning up.

9. The first back-test and undercut of the 50/75-day exponential moving average range has a high probability of holding as support or resistance. Buy or sell it for a 1-3 day move to generate cash flow.

10. Stocks above a rising 200-day moving average spend the majority of their time trending higher. The opposite applies when the 200-day is trending down.

11. Previous support can turn into resistance and previous resistance can turn to support. Use these zones as levels to trade against.

12. Support and resistance levels and key moving averages are ranges rather than exact levels. They often overshoot these zones before occasionally reversing at these levels.

13. Respect the FIB (Fibonacco) retracement zones. They often act as support and resistance levels.

14. ‘PAY-tience Pays’, however be nimble to react to opportunity to cut when a trade hasn’t been working.

15. Above all, know your time horizon.

Lester Davids

Senior Investment Analyst: Unum Capital