• Silver price is still probably forming a Bear Flag pattern on the 4-hour chart. 
• The pattern indicates a probable continuation of the bearish trend to targets substantially lower. 
• Support from a long-term support and resistance level at $25.80 is likely to provide a floor for any sell-off. 

Silver (XAG/USD) price may have formed a Bear Flag pattern on the 4-hour chart with negative implications for the precious metal’s price going forward. 

4-hour Chart 

After a steep decline between April 19-23 Silver price bounced off support at $26.70 and has since consolidated into a rectangle pattern. Taken together with the prior sell-off the whole formation resembles a Bear Flag pattern.  

According to technical lore, the expected move down from a Bear Flag equals the length of the preceding “pole” or a Fibonacci ratio of the pole extrapolated from the flag pattern down. In this case the pole is the decline between April 19-23. 

The Fibonacci 0.618 ratio of the pole gives a conservative target at roughly $26.30. If Silver price falls the whole length of the pole (Fib. 1.000), however, it will reach a more optimistic target of around $25.50. 

Tough support from a long-term upper range boundary line at about $25.80, however, is likely to offer support before Silver price reaches the lower target for the Bear Flag. 

A break below the $26.69 low of April 23 would be required to confirm a breakdown of the Bear Flag towards its targets.  

In February Silver price started rallying up to the top of a 4-year consolidation close to $30.00. After reaching just shy of this resistance level it formed a multiple shouldered Head and Shoulders (H&S) topping pattern in mid-April. 

Silver price then declined to the initial target for the H&S pattern at $26.70 and bounced. Since then it has been consolidating.