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Dan Zanger Trader's Log2

Parabolic moves in silver ETF AGQ signaled the end of the rally in April 2011 according to trader Zanger. The clues were a combination of three factors: first, the parabolic move showed investors were irrationally exuberant in buying, which is unsustainable. Second, volume was decreasing as the rally progressed. Third, the ETF failed to break above a resistance level it had hit previously, signaling a loss of upward momentum.

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382 views

Dan Zanger Trader's Log2

Parabolic moves in silver ETF AGQ signaled the end of the rally in April 2011 according to trader Zanger. The clues were a combination of three factors: first, the parabolic move showed investors were irrationally exuberant in buying, which is unsustainable. Second, volume was decreasing as the rally progressed. Third, the ETF failed to break above a resistance level it had hit previously, signaling a loss of upward momentum.

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L
Copyright
© © All Rights Reserved
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9/7/21, 11:38 PM Buy, Hold and Fold Tricks of the Trade - Traders Log

Figure 1 – Daily chart of the ProShares Ultra Silver ETF (AGQ)


showing a classic parabolic move and peak as of April 27, 2011
and Zanger’s comments. Chart courtesy ChartPattern.com

And as the above chart shows, AGQ looks to have hit a ceiling
by April 27 then failed to break above it. What signals provided
the clues that silver was due for a correction?

It was a combination of three factors says Zanger.

First and foremost, parabolic moves usually signal an end to a


rally because it shows that investors and traders are getting
irrationally exuberant in their frenzy to buy the stock. But the
https://www.traderslog.com/buy-hold-fold 4/16

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