I want to take a fresh look at silver because, after its latest drop, it is getting very close to my target zone, where it becomes a strong buy. It should be emphasized here that we do not have a fixed and rigid downside target, but rather a buy zone where the further it drops into that zone, the more of a buy it becomes.
The intelligent strategy here is to average down, which means buying as silver enters the target zone and buying more the further it drops into it. If silver dips below $50, serious buying will be in order. I sold most my physical in the $70-80 range and unloaded my SLV share about $8 off the recent top. It was a good trade and ended up getting me a new car.
The 5 year chart for silver provides an overall perspective. Here we see that after the parabolic blowoff late in January, the price broke down below the shorter term parabolic uptrend that had become impossibly steep. It then broke below the 200 day moving average, which had also been rising steeply, as expected. This price action damaged sentiment and caused silver to tumble further towards the strong support level. We have been expecting a halt to the correction and the birth of the next major uptrend. This chart clearly shows that silver is still in a major bull market. I have opened a new position in SLV, but with the premiums on silver I have added any of that yet. I was opening to get back in in the $40-50 range but we have not dipped as far as I wanted. I'm also a options trader so I was looking at LEAPs on SLV or the miners as I think industrial demand will not slow going into 2027.
What are your thoughts on where silver is heading?
