Nathaniel Mathe...'s  Instablog

Oncolytics Biotech Inc. (ONCY) has pulled back after setting a 52-week high at $4.93 back in early February. Shares are currently trading at $2.97 after reporting promising results last week. In this short post, I just wanted to highlight that short interest in the company in nearing all time highs around 7 million. For more information on ONCY please see my article 5 Biotech Stocks To Watch Under $5.

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Disclosure: I am long ONCY.

In my last article on the iShares Silver Trust (SLV) I suggested that the SLV would trade up to trend line resistance around $32 before possibly undergoing a decent pullback. At the time the SLV was trading around $30.60, soon after the article was published the SLV topped out around $31.60 before pulling back substantially to where it is today around $27.84. I advised the longer term investor to buy this pullback at the long term trend line resistance around $28.25 as I believe precious metals are a key component of any diversified portfolio. In this article, I will outline a simple shorter term trade which I will be looking to put on very soon.

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Since moving below the major support of trend line (2), SLV has found support and I believe we will see yet another move back up to trend line (1). Should we see this move back up, I am looking to enter a short position around the 200 day moving average ($29.69). I will be using a close slop loss just above trend line (1) currently around $30.50. I am using such a close stop loss because a strong close above trend line (1) sets the SLV up for much higher prices very fast. I am setting my price target around $26.69 which is near the lows set back in 2012. Also, be aware that the Relative Strength Index (RSI) has bottomed at 25 twice in the last 6 months. A move back down may slow if the RSI approaches this area again. Of course both the limit and stop loss orders will need to be adjusted to reflect time passing. The current risk reward ratio is favorable at 1:3.70.

For the long term, I remain bullish on silver for a variety of reasons but mainly due to my fears that fiat money will inevitably become worthless. A longer term investor should consider precious metals to better diversify their portfolio and use these pullbacks to slowly build positions overtime.

I cannot move the market nor am I trying to manipulate the price of silver in any way.

Disclosure: I am long SLV. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I may initiate a short position in SLV over the next 72 hours. I am long SLV through longer term call options as well as physical silver.

On Tuesday, the SLV closed at $30.76 which is just above the 50 day moving average at $30.74. Shares once again traded up to trend line resistance before falling back. Around the same level, shares found resistance at the top of the cloud. The SLV remains in the cloud, looking for direction. The RSI is coiling and ready to move. I believe we are at a breaking point right now! A move above the trend line would take us to about $32.00. Another move below the cloud should take us to the long term trend line resistance. Good luck to all!

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Disclosure: I am long SLV.