Recent Silver Performance Points to Breakout

• Posted August 22, 2012

Three weeks ago, we discussed the technical side of silver through the SLV share and why silver value may be ready to rise. The Silver performance in the time since then would set the tone for how we could expect it to perform through next April. The last several weeks have set the stage for the next silver bull run.

When we spoke of this on August 1, silver’s gravitation towards the red line or the green line was the main focus during consolidation. As you can see in the chart below. August’s silver performance in challenging the resistance level on the upside, points to the next breakout.

Recent Silver Performance

The key resistance levels were $26 and $28. Over the last several months, silver tested both resistance levels during its consolidation. But as you can see, it is once again attempting to break through the $28 level and advance further. Recent silver performance has resulted in a gain on the $28 ‘red mark,’ instead of the $26 ‘green mark.’ Therefore, it’s chances of breaking out have much increased since the beginning of the month.

Another point to make in case for higher silver is the “100-day moving average.” The 100-day moving average is the average of the closing price over the previous 100 days. In the SLV, the 100-day moving average happens to be $27.98. If this number is breached and held, the chances of a rally in silver go up even more.

August 21 saw the SLV open at $27.95 which is below the 100-DMA and the resistance level. But when August 21 CLOSED at $28.37, we saw it breach both levels. This was after an impressive gain August 20, as well. How it responds over the next few days will be crucial.

We were looking at the next several weeks in the ‘Silver Value May Be Ready to Rise‘ column. Now we are looking at the next several DAYS as the big indicator for future silver performance. Keep in mind, external forces are always at play. When the war with Iran starts or when the Euro falls will have an impact on all markets. But barring any black swan event, these are just a few ways to predict the market.

Procinctu always advocates acquiring silver in it’s physical form. However, using it’s stock price, we can better judge the proper times in which to acquire more or just sit back. Yesterday, the author has acquired more silver.