While silver bumped along the support line for the majority of 2013, technical analysts were given clues that the price would eventually resolve itself to the upside. One clue, for example, was silver's RSI, or relative strength index. After bottoming in late June 2013, the RSI began making a series of higher highs and higher lows as shown by the blue line on the upper chart panel. This suggests that silver, as an investment, was starting to outperform relative to other investment options. Or, said differently, investors began putting money into silver while pulling money out of other investments.
A second clue that silver would break to the upside came from its MACD. In the same way that its RSI began trending upwards, so did its MACD as shown by the blue support line in the bottom panel.
The RSI and MACD were flashing signs of strength while the price of silver moved sideways. This led me to believe that silver would eventually break to the upside. And, sure enough, during the week of June 16, 2014, silver (and gold) exploded to the upside on strong volume breaking through that descending blue line of resistance. Now that silver has broken out of a very long consolidation phase, I believe it will really start to move up in the coming months. The measured move* suggests a price target of at least $80/oz. While it may take a couple years to get there, the technical analysis of silver is very encouraging.
[*The measured move is calculated by subtracting the low point of the consolidation from the high point of the prior peak and then adding that number to the peak. In this case (using rough numbers), the peak was $50/oz. and the low was about $18/oz. Therefore $50 (high) - $18 (low) = $32. The measured move = $50 + $32 = $82]