iShares Silver Trust (SLV) is an ETF play on silver and I do not like to make a habit out of using technical analysis on an ETF due to the differences between how a regular stock works and an ETF, yet others do not care about the differences. However, this was a requested chart analysis so I wrote it up anyway.
SLV is seeing bullish activity with all the overseas fears/uncertainty and fears of the dollar weakening. This is one of my few long-term plays that I do not actively trade often as I feel the price appreciation will be significant over time and I prefer silver over gold at the moment.
Since breaking out from the small downtrend on February 1st, SLV has been in a strong uptrend within a relatively tight trading range. Keep in mind, it can break a trading range and not necessarily be an immediate sell, if it can hold its moving averages for support and start a new range. If it ever breaks below the trading range, pay close attention though. Currently, it is near the mid to upper part of the range which is not an area I tend to buy at without feeling confident in a bullish catalyst in the next day or so. I would much rather buy near the bottom of the trading range, especially after the recent move right now which has the RSI trending in overbought territory and the top bollinger band being tested. Overbought territory on the RSI does not mean it’s about to fall, it simply guides me on whether it’s a favorable area to add or just hold my position and ride it as long as I can.
As always, do your own homework to see if you agree. Good luck out there.
Mike
At the time of publication, Kudrna was Long SLV but positions may change at any time
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