With the iShares Silver Trust (NYSEArca: SLV) and the ETFS Physical Silver Shares (NYSEArca: SIVR) down an average of 8.6% over the past month and both having hit new 52-week lows on Monday, a cursory glance of silver and silver exchange traded funds would seem to indicate a buying opportunity its afoot.
A buying opportunity in volatile silver and the aforementioned ETFs may eventually materialize, but investors would do well to examine the charts and realize that patience is likely to indeed be a virtue when it comes to the white metal.
The chart featured at the end of this piece “was created when Silver was trading at $28 per ounce. I shared with Premium Members in June of 2012, that Silver looked to be creating a bearish descending triangle and the measured move was calling for Silver to hit $15 per ounce (see projection of red arrow above). Since the chart was made, Silver is down 40% in value and is nearing the projected price of the descending triangle,” according to Chris Kimble of Kimble Charting Solutions.
Translation: Investors eager to catch the falling knife that is silver probably ought to wait until $15 is seen. That is more than 12% below where SLV closed on Monday. Importantly, this is not the first time the $15 area has come up in the silver conversation.
Earlier this month, Eagle Bay Capital President and founder J.C. Parets, said his downside target for silver is $15. SLV is down almost 5% since Parets published his analysis of silver prices on Sept. 11. [A Slide Awaits Silver ETFs]
Kimble notes that he has been advising members of his service “that the $15 zone in Silver looks to be an interesting place to pick up some silver.”