Will the Silver Breakout Hold?

by: Jeff Pierce

Silver had a big move this week as did gold, but after taking a look more closely I have some doubts as to whether it can maintain it’s gains. If you look at a daily chart these indicators are really not in an area where a big move starts or even continues from.

  • MACD is under it’s signal line
  • ADX has peaked and is declining
  • ATR is at it’s highs

The chart below () shows it’s fast move to previous highs. That sometimes is not such a good thing if the move is too fast. We’ll know by the end of the week if this is a breakout or a double top but if you want to try and get an edge, keep an eye on Pan American Silver (NASDAQ:PAAS), Silver Wheaton (SLW). These two have had very clear breakouts and should not move below their confirmation line.

One other note worth mentioning is that the actual metal $SILVER hasn’t broken to new highs while SLV did. Could be significant ().

Other stocks in the sector are Coeur d'Alene Mines (NYSE:CDE), Silver Standard Resources (NASDAQ:SSRI), Silvercorp Metals (NYSE:SVM), Mag Silver (MVG), Endeavour Silver (NYSE:EXK) and Hecla Mining (NYSE:HL)