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« Gold Going to $1500/oz – John Embry | Main | Silver at a Critical Juncture »

Silver Wheaton Corporation An Insurance PUT!

SLW Chart 15 Sep 09.JPG

In a raging bull market it is difficult and dangerous to move against the tide, however as an insurance for our silver stocks portfolio it might be worth the purchase of a few PUT Options. As we wrote recently silvers progress is influenced by gold prices and they are in turn influenced by the strength or lack of it of the US Dollar.

The chart for silver suggests that it is overbought as does the above chart for Silver Wheaton Corporation (SLW) where the yawning gap between the current stock price and the 200dma, indicates to us that a slight pull back could be on the cards. Also note that the recent increase in trading activity appears to be waning as can be seen by the drop in volume over the last few days. The technical indicators are high with the RSI at 69.02, again suggesting that a breather may be on the cards.

As much as we expect the dollar to continue to decline and gold to make new highs taking silver with it may be worth considering a few PUTS as an insurance against a fall in silver prices and the stocks in our portfolio. So, in examining the charts Silver Wheaton came up as a possible vehicle for this particular trade. We anticipate that this possible drop in price levels will be short lived so it may be a case of buying for a short term move and being prepared to close the position should the metals resume their rallies. We will take a another look closer to the New York Market opening before making a decision but we thought a heads up on what we are thinking might be useful.

Otherwise its hold fast to our core position and ride out the bumps.

Your thoughts are of course most welcome.

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Reader Comments (3)

Could I please have a list of your core positions in Silver
Many thanks

September 15, 2009 | Unregistered Commenteralan

Hello Alan, I am not associated with, but I have had a strong core position in SSRI, SLW , HL , and PAAS...and they have done excellent. They are running strong currently ,but many are overbought , so at this point I would just put them on a watch list and buy the pullbacks if they come down on light volume. Maybe they'll come back close to the 50 dma...I look for that and watch the stochastics too.

hope this helps , happy trading...Robert

September 15, 2009 | Unregistered CommenterRobert


Will do an update soon.



September 15, 2009 | Unregistered CommenterSilver Prices

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