Although silver has been on a downward spiral since the month of February this year, a major part of the fall was of a corrective nature as it had shown a sharp rally last year.

The corrective fall should have lasted till $4.85 and in a normal circumstances and then it should have moved in the range of $4.80-$4.95. This would have strengthen the white metal's technical position.

However, a fall below the range of $4.80 has chanced the situation drastically. It has made the metal extremely weak and in all probability, the fall will continue. The weakness can take the white metal to a level of around $4.2 where it enjoys a good support. Incidently, in July 1997, this was the level from where themetal had started its upward rally which lasted till the level of $7.67.

The latest dip has also affected the position of other indicators. The 21-week Relative Strength Index (RSI) is at a 2-year low. This is nothing but showing the strength of downtrend momentum.

The weekly Moving Average Convergence Divergence (MACD) has also dipped below in the triggerline in the oversold zone. The moving averages are already in negative phase. Overall, the current position can be considered far from impressive.

The current position of chart and oscillator suggest that the fall is expected to last for some more time and it can touch a level of $4.20 in the coming months. Minor rally may occur in between but will not last. Silver traders may take an exit at the current level. Re-entry should be considered at lower stage.