Technical indicators are not perfect and if they were we would all be fat and happy.

However when we see a chart formation such as the one above that silver recently formed it does give us reasons to be cheerful. From this chart we can see that the MACD black line has just crossed over the red line in an upward move, sometimes referred to as the golden cross. If we back track through silvers history we can see that this is usually followed by a substantial move upwards in the price of silver. It will be interesting to observer silvers behaviour over the next say four weeks and see if silver conforms or not. Our hunch is that it will but short term trading is always very difficult so if you do decide to invest based on this type of indicator then pick a quality silver stock that you would like to own anyway. Then you wont be too disappointed if she misbehaves.

Silver stands at $13.74 today so we will check it out again on the 3rd of July 2007.