Technicals | 11:30 AM
By Michael Gable
The S&P/ASX200 Index continues to creep higher, along with US share markets. It is approaching old highs, but we do not see any change of trend yet and upside momentum is still in place.
The US dollar is still drifting lower and oil is starting to make a move higher.
However, silver is something we have highlighted before as a commodity to keep an eye on and it’s now on the move.
We offer a technical view.
(The chart above has been converted to a logarithmic scale where equal movements higher in price represents equal percentage units).
When we last looked at the silver chart on 20 May, we noted a break above US$33.50 was the next buy signal and it should run up towards US$37.50.
That breakout has occurred and silver is now rallying.
As it approaches that US$37.50 level, it is worth revisiting the longer-term chart which we analysed back on 15 April.
As noted back then, “price action for the past 45 years resembles that of a large cup and handle formation. This means that if we get an upside break, we could end up with a substantial multi-year move.
“That is, a monthly close above US$37.50 could be the start of a big rally in the price of silver where it could go up multiple times in value.”
Silver therefore remains a hold here and is a buy on any dips. Alternatively, wait for a monthly close above US$37.50 for the next major buy signal.
An ETF available to Australian investors is ((ETPMAG)).
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Michael Gable is managing Director of Fairmont Equities (www.fairmontequities.com)
Fairmont Equities is a share advisory firm assisting Private Clients with the professional management of their share portfolio. We are based in the Sydney CBD but provide services to private clients across Australia. We believe that the concepts of fundamental analysis and technical analysis of stocks are not mutually exclusive. Regardless of whether you are a trader or long term investor, combining both methods is crucial to success. As a result, the unique analysis of Fairmont Equities is featured regularly in the media such as Sky News Business, CNBC, The Australian Financial Review, and the ASX newsletter. Contact us for a free trial of our research and information on our portfolio management services.
Michael is RG146 Accredited and holds the following formal qualifications:
Bachelor of Engineering, Hons. (University of Sydney)
Bachelor of Commerce (University of Sydney)
Diploma of Mortgage Lending (Finsia)
Diploma of Financial Services [Financial Planning] (Finsia)
Completion of ASX Accredited Derivatives Adviser Levels 1 & 2
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Disclaimer
Fairmont Equities Australia (ACN 615 592 802) is a holder of an Australian Financial Services License (No. 494022). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.
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