Silver Prices take tea with 200dma

Print This Post | Topic: Silver — July 21st, 2010

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.