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« The Year of the Roth | Main | Government Mules »

Silver Prices take tea with 200dma

Silver Chart 21 July 2010.jpg

The summer doldrums have descended upon us as evidenced by the lackluster performance of the producers, however, this should be thought of as the bargain hunting season, especially for silver bugs. The broader market is looking a tad rocky to say the least which could also have a knock on effect for the silver producers. The UD dollar would now appear to have formed a new downward trend as we suggested just two days after it topped in early June.

The chart is interesting as we can see silver prices have eased giving the bears the opportunity to call lower and lower price levels, as we see it they are about to shoot themselves in the foot once again. The technical indicators are fairly low and may well drop a little further presenting us with a wonderful buying opportunity. Note that silver has returned to take tea with its 200dma, a return to more of a normal position on charts, if there is such a thing. Don't expect this window of opportunity to show itself for too long, its a window of three to four weeks only, setting the stage for a buying spree as the fall arrives.

If you have a few favourite silver producers or wish to acquire more of the metal itself you could place a few low bids and sit back and wait. You may not get all that you want but on a slow start to a trading session there may be a spike down which would fill your orders nicely.

The next four weeks is the time for reviewing your portfolio and having the courage to do a little pruning, something we need to do and are working on that vary exercise right now. Having a stock which should be going gang busters but is limping along is akin to the football fan who thinks his team should win the cup, but who are far from impressive at the moment. If they are not shaping up, then take a long hard look at just why you own them and ask yourself, have they earned a place on your statement? If not, get your skates on and look for alternatives.

Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.

Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more. have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

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Reader Comments (6)

Are you repeating my style?????? Or, am I a great analysis????

July 22, 2010 | Unregistered CommenterJerrold Minyard

Are you repeating my style?????? Or, am I a great analysier????

July 22, 2010 | Unregistered CommenterJerrold Minyard


July 22, 2010 | Unregistered CommenterJerrold Minyard

not sure just what your style is!

July 22, 2010 | Unregistered CommenterSilver Prices

I predicted a drop in silver. Check two articles back. I used Hecla minning with the moving averages, and the bollinger band. Hecla minning being a bell weather. That my style!!!!!!

July 23, 2010 | Unregistered CommenterJerrold Minyard

Anyway, I'm still short the metals. The technical are even more bearish. The Dow has formed the death cross. In the next two month will tell the story. The market will be pushed so low people will be in bonds, and the dollar will hit a new high. It will be a great opportunity to pick up some minning stocks, and purchase some physical metals. I fell it will be a mind Blowing chance.

July 23, 2010 | Unregistered CommenterJerrold Minyard

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