Silver Stocks Look Shiny Indeed

Silver stocks have been bullish recently:

click to enlarge

The following chart shows that the Silver metal (SLV) was over-bought in May-06 and again in Dec-06. The best entry point was in June-06.

Recently in Sept-06 and Jan-07 there were pull-backs to attractive buying points (ie, the Accumulation Zone).

But the market still looks bullish for Silver in early February, and I think there is more to go on the upside in the next three months. I like the action of the RSI, which is showing that the last two entry points happened at RSI values above the 30-line. That’s a bullish sign:

With this illustration, I show the comparative price of Silvercorp (TSE: SVM) (in blue) to the SLV metal ETF following the full TSE listing of Silvercorp last May. On a comparative basis, SVM has finally caught up to SLV.

As you may be aware, my top pick in this space is Silver Wheaton (SLW).

I am going to stick with the Silver trade unless I see the price of Crude Oil dropping below 55, or get an indication from BoE and ECB tomorrow that rates are rising again, or a statement from the G-7 ministers at their meeting this weekend in Germany saying things like they intend to start tightening across the board to snuff out inflation.

Comments

[Nova Law:]

This entry is a perfect example of Bill Cara's dishonest posting style.

Notice how he says "the best entry point [in silver] was in June-06." He also opines that silver was "overbought" in December 2006.

If we go back through the Bill Cara archives for June 2006, you will not a post in June 2006 which opines that silver was currently at a "good entry point." In fact, he barely had anything to say about silver at all. Thus, he tries to go back and claim credit for foresight for a call which he didn't make at the time.

Here are his June 2006 archives: www.billcara.com/archi.../

Fast forward to December 2006, where Cara today opines that silver was "overbought." OK, what did he say about silver two months ago? His December archives are here:

www.billcara.com/archi.../

As I can see, the only material comment he made about silver was on December 13, when he said "gold and silver prices weaken overnight." No analysis about silver being overbought back then.

What's next? A post which claims insight because 1981 was the perfect time to buy the IPO of a little-known computer company called "Microsoft"?

Take a close look at the actual track record of Bill Cara's calls. While he occasionally gets one right, more often he makes posts like this one, where he implies a foresight to himself which does not stand up under factual scrutiny. Anybody can go back in time and say, for example, that they called the top of the bull market in March 2000 or that they called the bottom in November 2002 - but that doesn't mean they're being honest and truthful about it.

2007 Feb 08 08:02 AM

[Walter Doelz:]

Bill, lets here your side of the story. I'm not going to take any of your information seriously until you prove Nova Long wrong.
Sirwalter

2007 Feb 08 09:02 PM

[Arnold Layne:]

I don't see Bill claiming any clairvoyance in his post today. He's merely interpreting the chart.
There is no implication- only incorrect inference on Nova Long's part.
Get a life.

2007 Feb 09 12:20 AM