Futures Outlook of the Week 2/24/14
It has been a while since I’ve written about Silver. Part of that is due to the fact that we have been focusing on the earlier runner in Gold (Gold Report) while Silver remained range bound. Silver has broken nicely and thus far sustains its gains.
The last time I dedicated a full piece to Silver was 08/07/13: Every Cloud Has a Silver Lining. In this piece, I spoke about the descent in the metal, the thought process around protection and numbers to watch for a bullish break. (I would encourage you to read this piece to refresh your memories as to where things stood.)
One key thought per the article last August was: “Our true issue in Silver right now is the side-winding or consolidation that is occurring between 18 and 21 give or take. Silver may end up staying in this range for some time, but it is important to realize once again that every consolidation leads to a break. The purpose of today’s article is to get you focused on the range of importance and to throw a caution flag since Silver hasn’t rebounded yet with the energy that I would like to see on the bullish side of the coin.” Those were my thoughts last August and that range held and held.
Well, as we have been focused on our leader in this race, Gold, it is important to note that Silver is now also out of the gate.
This was the Monthly chart for Silver last August:
In the prior article I also mentioned: “Ultimately, I still would like to see a very healthy Silver rally, but I fear that it may not be on the books at a rapid pace…” Now writing once again in February of 2014, it is obvious that those thoughts were accurate and Silver definitely took its time.
This is the current Monthly chart for Silver:
I think that it is important to evaluate Silver on a longer term basis, although short term plays can also be made. We have recently pushed beyond the 21 territory and are starting to hold our ground there.
Here on the Daily chart you can see just what kind of resistance we built between December and February. The break beyond the $20.50 level was beautiful and the fact that we are trying to build a new base at 21.50 is encouraging. Silver has been a longer term favorite of mine and I am personally excited to see it trying to find its legs again.
Even though all of the Medals have been handed out, it’s not too late for you to bring Silver home. There are a number of ways that we can customize a Silver play for you including a longer term play that we are looking at right now with a cost of $2,700 plus transaction costs for a gross potential of $25,000 should Silver hit target by late 2015.
Contact us directly and we will be happy to create and employ a custom strategy for you so that you can take home the Silver.
Remember, that we are here to keep your options clear.
Lindsay Hall is Chief Market Strategist with commodities specialists RMB Group. Get the latest futures and commodities commentary from Lindsay and the RMB Group on our Big Move Trades--an online report offering trading ideas backed by research.
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