Silver: Formed a base?

The last few days has seen silver form a base from which the beginnings of a rally can be detected.



We normally do not like to look at silver on such a micro level but this chart could be telling us that silver has indeed found some support on which to base a rally. We could still experience some more of the sideways action typified by the summer doldrums but May is now behind us giving us some room to feel a little more optimistic about the future.

As we can see from the chart, silver appeared to form a double bottom at the $12.80 level and as we write has moved up to $13.52 for a gain of $0.72 or 5.6% since the 24th May 2007.

Although this is a small move and could reverse as silver has often done in the past, we see this as an indication of better things to come. So if you have a few favourite silver stocks start accumulating now even if it is only a few for now and then buy again a little later down the line when you are more confident that silver is actually on the move.