Sunday, October 9, 2011

SLW Head and Shoulders Top

Click on Chart to Enlarge

I have given some detailed analysis of silver and posted some SLV etf trades over the last few months. Also I have mentioned stocks like SLW and SSRI which are silver stocks. I am posting this chart here on SLW because it is an absolute, no doubt about it, meets every criteria in the textbook, head and shoulders top that is at a short sell point NOW, and projects a greater than 50% loss from these levels. I am not going to post a trade on it here because at this point in time that is not the function of this blog.

If you have a technical analysis text book then get it out, check out head and shoulders topping patterns, and compare it to this one as far as price, volume, trendlines, and backtest/return moves. I use John Murphy's Technical Analysis of the Financial Markets.

If last week's low is broken, price should not return to the neckline again. So the chart above offers some basics as far as where the important points are and what the target is. While I can't guarantee anything, I see this one as shooting fish in a barrel. I already hold puts on this one which I got on the day of the high of the right shoulder. But if I didn't hold it, I would get in either ASAP or on a break of last week's low.

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