Medium term
Trade view / 22 September 2016 at 7:09 GMT

Silver miner ETF looking bullish going forward

Background

In the wake of the Federal Reserve Open Market Committee meeting and decision to hold rates steady, the mining complex held its early gains and increased them somewhat during the day. This was the the case also for the Global Silver miners ETF (SIL:arcx).

This market is trending higher since the low in January this year. The peak in August doesn't display the correct features from a cycle perspective nor a price perspective to be a peak of larger scale thus we are interested in buying dips and are maintaining a bullish bias towards this market.

The low seen on September 1 is indicating a possible end to the correction from the August peak as we had a 180 degree time cycle alignment with the whole advance from the January lows into the peak in August. At the same time the market turned on a Gann price pivot, which is indicative of a low within the current trend higher and a possible challenge of the previous highs.

The oscillators are sure looking bullish and has turned higher from oversold levels, and with the price low of SIL:arcx on September 16 they have made a higher low and are now heading higher. Ideally at least the Slow stochastic indicator (STOC-S) should now get into an oversold reading before turning lower again.

Key support is located at $43 and an intermediate support is found at $46. Resistance is now found at $49 and $53.

Management and risk description

The plan is to buy the SIL:arcx for a continued move higher in the days and weeks ahead. One can long on price action above $46, -- ideally, we see a dip to $46.50 before a continued move higher. The target is set to $49 and $53. The stop could be placed at $43 or if one like a tighter stop upon a daily close below $46.

The risk to this setup is a larger correction then we have seen thus far. The thinking goes that we in such a case should see such an outcome quite fast. Sometimes the kind of bullish price action we saw yesterday experiences an immediate fade.

Parameters

Entry: buy above $46.

Stop: $43.

Target: $49 and $53.

Time horizon: 1-3 weeks.

SIL:arcx daily chart
SIL:arcx daily chart
Source: SaxoTrader


SIL:arcx daily development chart
SIL:arcx daily development chart
Source: SaxoTrader

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail