Silver is currently traded for about $12.80 per ounce, $7.20 away from our target of $20/ounce.

We think a great bull rally will being in silver and silver stocks at the end of the summer, but a technical upside breakout could be just weeks away.

Silver prices were in a declining channel until they broke down to below $12.50 in late June. Therefore we signalled a BUY on silver, predicting a short term rise of over 50 cents. Silver prices went on to rise roughly a dollar so we appear to have made a good call there.

The declining channel could also be a declining wedge as the lines that make up the ceiling and floor of the channel are not exactly parallel. Falling wedges, with a prior uptrend, are usually thought to break up, rather than down and out. Silver had a uptrend previously, and the long term uptrend is still intact, so we expect silver to break up through this wedge, proceeding the major rally we see coming at the end of the summer.

If we see an opportunity for a short term trade on silver, we will let our readers know immediately. Subscribe to The Silver Prices Newsletter to stay informed.

We are looking for a break up above $13.50 to confirm a upside breakout from this wedge, which should signal the beginning of a new rally in silver prices. If we see silver prices falling below$12.50 we will see this as an opportunity to buy for a short term trade.

It should be noted that the wedge lines are narrowing and the Bollinger Bands are coming closer together. This tells us that volatility in decreasing and this usually happens before the next move in a trend, so in the case of silver, this decreasing volatility means that an upwards swing is due to take place in silver prices some time soon.