Scaling into bullish Silver trade

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Silver Futures for March 6, 2013

I see all these articles on selling silver…well I’m a buyer for clients. Silver futures have declined 10% in the last month and are lower by 16% from their highs in the end of November. I think silver was a sale $32.50-$34.50 and a buy now. My understanding is we try to buy low and sell high? Look at the chart above it appears futures are finding solid support around$28.50/ounce in the May contract. For the last 11 sessions we’ve been in $1 trading range and my feeling is that when we get out of this consolidation phase the direction of the breakout will determine the next leg.
As a speculator I am positioning some clients thinking the direction will be to the upside. I’ve suggested scaling into bullish trade and think traders should position themselves in either futures or options to capitalize on a return to above $30/ounce in the coming weeks. I think we are in the process of putting in 2013 lows as of this post. We all know past performance is not indicative of future results but just as an exercise let’s examine what silver futures did the last 3 years in Q1: 2010- +6.2%, 2011- +20.5%, 2012- +16.0%. Let’s assume we see the average move in 2013, which would equate to a 14% gain and from where we started at the beginning of this year would put us at $34/ounce by month end. Do I think this will happen …not necessarily? But I do think that is a reasonably target in Q2. Again past performance is not indicative of future results.
My stance is that every commodity investor should have a portion of their commodity portfolio long gold and or silver at these levels based on current dynamics. Contact me for specific trade ideas based on your risk tolerance, size of allocation and profit expectations.
To discuss in more detail this chart or any other you can reach me at: mbradbard@rcmam.com or 954-929-9997
Risk Disclaimer: The opinions contained herein are for general information only and are not intended to provide specific investment advice or recommendations and are not tailored to any specific’s investor’s needs or investment goals. You should fully understand the risks associated with trading futures, options and retail off-exchange foreign currency transactions (“Forex”) before making any trades. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change without notice. Past performance is not necessarily indicative of future results.

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