Is Now The Opportune Time To Buy Silver?
Just 9 short days ago your friendly Gold Enthusiast advised that he’s waiting for signs of an uptrend before buying into silver. Just exactly what that means might be up for debate; usually, an uptrend requires starting from a decent base with relatively low volume, and from there a rise in both price and volume.
Are we seeing that in the current chart for SLV?
(Source: Fidelity.com)
The 6-month chart is both enlightening and confusing. During Example 1, we see what looks like a promising little candlestick base occuring at the same time as a low RSI – but silver doesn’t really go anywhere, only up about 40 cents before the run dies out.
Example 2 is a little better from a price and RSI perspective – a gain of 1.40 as silver ran from an RSI down around 32 up to 70. But volume didn’t give a good indication of going down before the run, then increasing during the run.
Things like indicators not working make it hard to anticipate, predict, or in general have confidence in trading.
Right now silver has gotten close to a recent low, and is up in premarket trading. Volume has been on a slow decline recently so that’s a positive sign. And silver bulls had been backing off on bullish bets…
…until this past week. Now we’re seeing signs that silver bulls are going after silver again. Your Gold Enthusiast thinks it might be a bit early yet — most investors are still chasing equities as the US market makes several new all-time highs.
So if we see a small rally and it fades out, don’t say we didn’t warn you.
Signed,
The Gold Enthusiast
(DISCLAIMER: The author holds no position in any mentioned security. The author is long the silver sector via a small position in USLV. He may daytrade around this position but has no intention of trading out of this core positions in the next 48 hours)
Note: This article originally appeared at The Gold Enthusiast on February 13, 2020.
Category: Commodities
