Common readers of Kamich’s Korner on Actual Cash know that I reply to subscriber questions infrequently. (I do not reply to questions on penny shares and something that’s traded “by appointment” — you might be by yourself there.) One subscriber requested about silver, particularly the silver ETF iShares Silver Belief (SLV) .
“Why does it have such a distinct sample from gold and does that imply it’s extra bullish?” the reader requested.
Let’s get out our sprucing material and have a look.
On this each day bar chart of SLV, under, we are able to see a combined image. Costs made a low with the broad market final March. SLV rallied to an August excessive as Robinhood merchants piled in after which largely traded sideways with the $22-$20 space discovering shopping for curiosity from September to November. Costs then rallied to the start of February with a pointy upside spike because the Reddit crowd joined the fray.
Discover the massive surge in buying and selling quantity? Costs are actually under the cresting 50-day transferring common line however above the rising 200-day transferring common line. The On-Stability-Quantity (OBV) line reveals a optimistic development for the previous 12 months, suggesting that these numerous new entrants to the market have largely stayed with their purchases. The Transferring Common Convergence Divergence (MACD) oscillator has been hugging the zero line since September and that tells me the value motion shouldn’t be significantly robust. It is perhaps outperforming gold however by itself it’s going nowhere quick.
On this weekly Japanese candlestick chart of SLV, under, we get a distinct perspective. This chart is certainly combined. Costs have been buying and selling sideways for months however stay above the rising 40-week transferring common line. That is the closest that costs have been to the common line in months and I’d recommend that technically oriented merchants may very well be eyeing purchases on a check of the road. The weekly OBV line is an issue for the bulls because it has been weakening since August — a lot totally different than the each day OBV line. The MACD oscillator has been weakened from September however is poised to show upward if costs can rally quickly.
On this each day Level and Determine chart of SLV, under, we are able to see the $21 space as a possible draw back worth goal. Costs held that space in September and November, BTW (search for the A, B and C on the chart).
On this weekly close-only Level and Determine chart of SLV, under, we used a conventional even-dollar scaling technique. We’ve a number of worth historical past on this chart and a possible longer-term worth goal of $54.
Backside line technique: You may see a combined image from these 4 charts (above). We might decline to $21 once more and we may even see an enormous rally to $54. I think the U.S. greenback will resume its longer-term downtrend sooner or later in time and that may in all probability be the catalyst for silver to maneuver considerably increased. Keep tuned.
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