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Silver: Technicals Suggest Very Bullish Long-Term Outlook

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It's clear from the charts that silver and silver stocks are in position for a potentially spectacular move over the next three to five years.

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The super bullish outcome would be driven by silver making a run at and eventually surpassing $50/oz. The equities are closer to their all-time highs and will likely break to new highs before silver clears $50/oz. Certainly, the "super bullish outcome" is predicated on silver breaking through $50/oz.



We know a few things. First, we are in a new cyclical bull market. Second, we are moving closer to the beginning of the bubble phase in this bull market. Third, in a bull move, silver acts like gold on steroids. It's clear from the charts that silver and silver stocks are in position for a potentially spectacular move over the next three to five years. We believe that the silver stocks can break to new highs in the next 12 months and that silver won't be far behind. The bubble phase is certainly several years away but these charts illustrate the potential for massive breakouts which would generate the momentum that leads into a bubble.

In the meantime, silver and the silver stocks have rebounded strongly. One way to get broad exposure to silver stocks is the Global X Silver Miners ETF (SIL), which lists 25 of the world's top silver mining companies. However, many of the companies on the ETF produce silver as a byproduct of other mining and the ETF has not kept pace with the rise in silver bullion. For pure silver exposure, consider the primary silver producers: First Majestic Silver (AG), Pan American Silver (PAAS), and Silver Standard (SSRI). Two ETFs that track silver bullion are iShares Silver Trust (SLV) and ETFS Silver Trust (SIVR)

Similar to the gold stocks, we see an upcoming pause or pullback in silver stocks over the next month. October is typically a weak month. Many stocks have rebounded substantially and with strong momentum. A pause or correction in October stands between gold and silver miners and a retest of old highs in the winter. It would also mark a great buying opportunity ahead of much higher prices.

Editor's Note: See more from Jordan Roy-Byrne at The Daily Gold.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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