Tuesday, December 28, 2010

Trade Alert: SLV

In looking at the chart of SLV I am admittedly conflicted. On the one hand I am not convinced that we are out of the woods yet. I won't be until we break the old high of $30. We are a long silver from under $17.

On the other hand you can see the triangle pattern that formed in December. Take a good look at the chart and make sure you see it. Then look at the gap in the final stick. That final step represents a break of the triangle pattern. According to technical analysis and my experience that is a very bullish sign.

We are already long SLV our full position, but we will use his strength to move our stops up.

Now look at the 10 day chart and the 15 minute time frame. You can see the gap and break above $29. If SLV is going to continue to run it should not fall back into the gap. However stocks often fill their gaps before moving on. But the chart shows obvious strongly support at $27.75. So, I will set the stop at $27.50.

Move all stops from $23.12 up to $27.50.

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