I also drew a trend line on the True Strength Index (TSI) indicator to assess the threat of a trend line break sell signal, and observe that the TSI is not currently making a negative divergence (that is, current TSI reading is higher than the previous high TSI reading of 0.24).
Also, there are various moving averages that will act as resistance to upward price movement. The 50 dma appears to have been conquered. The 100 dma is overhead at about 23.71 and should ZSL make it to the 200 dma before the correction in silver ends, I estimate that resistance level to be about 39.50.
In brief, these two charts do convince me that the upside expectation for ZSL is reasonable. The silver chart shows that the overall pattern has played out exactly as I expected and wrote about a few days ago. Namely, the parabolic rise blows up, a reaction rally creates a trend line that is finally broken to the downside. Then a bear flag forms just under the former trend line – which is a second attempt to rally silver price. The previous trend line of the reaction rally acts now as resistance, not support, to upward price movement. Then the bear flag fails with price dropping sharply lower.
On the dollar side, price is trying to get through the 100 dma. If successful on a closing basis there is a decent chance the dollar could make it to the blue 200 dma overhead. If the dollar should make it all the way up to its 200 dma, that should be the bottom in this silver correction and definitely a time to sell ZSL.
Related ETFs: Sprott Physical Silver Trust (NYSE:PSLV), ProShares Ultra Silver (NYSE:AGQ), ProShares UltraShort Silver (NYSE:ZSL), iShares Silver Trust (NYSE:SLV), SPDR Gold Trust (NYSE:GLD).