Silver prices have been on quite a run recently but it looks as if they are now overbought and due a correction.

Although all the fundamentals of this silver bull market still support a large rise in silver prices over the long term, in the shorter term silver prices appear to us to be overbought and due a correction.

Technically speaking, silver is trading a good $1-$2 above its main moving average lines and could drop back to its support line at around $14.50. The technical indicators also suggest that we are in for a drop in silver prices as the RSI has hit the top of its range and is heading down, as is the STO. The MACD appears also to be turning down and we could see a negative crossover (where the black line breaks down through the red line) in the next week or so.

For these reasons we are not recommending any buying of silver stocks at these prices, or silver itself as we believe both are due a drop in the short term. Longer term however both silver and silver stocks are heading much higher, so this small correction should not worry long term investors.

When silver prices fall to a position where we think any further downside is limited, we may signal a short term trading BUY on silver as we have done in the past. (Please see here and here.)

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It may also be of interest to read our gold website, www.gold-prices.biz as we think that gold and gold stocks are also going to correct. You can also subscribe to The Gold Prices Newsletter by clicking here.