Silver Price Analysis – Silver Continues to Build Momentum

Silver Technical Analysis

Silver has gone back and forth here during the early hours on Thursday as we continue to see a lot of support at the $90 level. The $90 level is a large, round, psychologically significant figure and it is an area that I think will continue to be important. However, if we were to break down below the $90 level, it could open up a move down to the $85 level.

To the upside, I think we are looking at the $100 level as a potential target, and I do think eventually we get there. It’s just too big a juicy target for traders to ignore. In the short term, you have to look at each of these dips that occur as a potential buying opportunity, but you also have to be very cautious with your position sizing, as there is so much in the way of volatility and leverage in the silver contract that you can get really hurt, really quickly.

A One-Way Opportunity

Nonetheless, it’s a one-way trade. You certainly shouldn’t be shorting the market. There’s no real argument for that. As a result, it’s a one-way opportunity. I look for value in silver, and I take advantage of it.

I do think someday a lot of people get hurt, and they get caught on the wrong side of this trade, but right now it’s obvious that it’s a one-way ride due to a lack of physical supply and, of course, just overall momentum. That can sometimes overtake a market as we’ve seen here. I remain bullish, but I prefer to buy silver on sale.

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