Hi Ho Silver?

Has silver finished its correction?  Maybe, maybe not.  I'd urge everyone to be cautious, but let's look at a few charts to take a look at what we are dealing with on a technical base.

Let's look at some bellweather silver companies.

First SVM, Silvercorp.

First, it broke out over long term resistance of 13.50.  It then proceeded up to 15 before pulling  back to around 12 recently.  So, a drop of around 20%.  Not a bad correction.  A lot of times a stock will pull back after a breakout to the breakout point.  In this case it pulled back all the way to 12, but was still a secondary support after the 13.50.  I think if it clears 13.50, this will now act for support on this stock.  Also, look at the volume on this pullback.  It has been declining, so it does lack some conviction.  Unless the silver market implodes, I am somewhat bullish on the short term prospects.


Next, SLW, Silver Wheaton

Silver Wheaton has a similar story.  It broke thru the resistance at around 42, ran to 46.5, and has drifted back to the 38 level on declining volume.  If it breaks back above 42, I think that will be the new support.

So, I would still be cautious in taking any positions, but look for these stocks to break thru once again.  If they do, I would add these to my portfolio.

Full Disclosure - I own SVM and SLW.

Until the next time...

Fiat Doubter