Tuesday, January 13, 2015

Silver Update

Recently I had mentioned that silver may be set for a directional advance.  So far that call has held up well with silver up over 7% in the 2 weeks since that post.

Sow silver is at resistance from the early December high and is at a potential continuation or breakout failure point.  My personal opinion here based on the technical analysis is that the breakout will succeed and price will continue to advance in the coming weeks or few months.

While I didn't give a specific trade entry or price, if you took that information and got into silver or are holding silver, and if you would like any input on specific scenarios depending on which option contracts were purchased or where and when stops can be moved on equities or futures, then either comment or email reply to this post and I will try to assist you or create a follow up post.

As a personal note I do have 15 strike SLV options that expire at the end of this week.  They have seen some volatility during my holding period by are currently up right around 100%.  So I will be vigilant here about watching a potential breakout for deciding whether to hold until the end of the week, or exiting out sooner.

Also I do have some options that expire at the end of January which are 17 strike SLV calls.  So they are out of the money, but I got them at 0.13 per contract and they are up about 50% currently.  However, time decay erodes them every day here, and so it will take a continued move higher for them to really be the winner I hoped for.  Based on some projections I felt that SLV may rally into the $18-19.50 range by the end of the month.  That would make for a nice potential gain.  Given the significant OTM position at entry, it is a small position that can afford to lose all of its value.  But it has the potential for a big % gain, and so I am planning on holding until expiration or until the weekly %K stochastics goes above 80 at which point I will immediately exit the position.  That only gives me 2.5 weeks for that to happen, but it is still possible if moving above the December high creates some short covering or new significant buying.  That scenario could easily boost silver 10% or more in just a couple days.


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