Saturday, February 22, 2014

Trade Alert: SLV

The chart is saying by silver. You can see how SLV gaped up above the 200 day moving average earlier in February. The last time SLV traded above the 200 day moving average was in February 2013. What's most impressive is to notice how both the 200 day moving average is flattening out and 50 day moving average is actually turning up.  This is how stocks turn.

The next thing to look for is moving average crossover. Notice how the moving average crossover in March of 2013 was the precursor to a long extended decline to the $18 range. Moving average crossovers are significant and it looks like we are about to experience another one, this time on the outside. If we do eventually get a moving average crossover, I would buy with abandon.

The only issue with SLV is with the stochastic which is turning downward from the overbought zone where it was pegged at 100. The last time it was pegged at 100 was in August and you can see what happened shortly after.

So, we run the risk of small downturn this upcoming week which may actually fill the gap, which would be a good thing. You can see a gap on the intraday chart starts at $19.75 and I would be surprised to see SLV drop much below this.

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