I’m back with another “Chart Check,” this time focusing on something the WallStreetBets Reddit traders have been talking about, and that’s a short squeeze in the price of silver.
Chart Check is a new segment idea I’m putting into the rotation along with my “Mailbag,” where I answer your questions. And in it, I’m using technical analysis to identify investment opportunities in various sectors of the stock market.
I see a major speculative opportunity for a short squeeze in the price of silver. And it’s not just because these Redditors may or may not have been trying to force a squeeze.
There are a number of exchange-traded funds silver investors invest in… Like Global X Silver Miners ETF (NYSEArca: SIL)… Sprott Physical Gold and Silver Trust (NYSEArca: CEF)… and Aberdeen Standard Physical Silver Shares ETF (NYSEArca: SIVR) to name a few…
But my analysis is on the iShares Silver Trust (NYSEArca: SLV) because it’s a liquid ETF, and it has a good pattern that illustrates the potential for a short squeeze in the price of silver.
Mid-March of 2020 was where we saw the bottom of the stock market amid the pandemic panic. Since that bottom, the price of silver (in this ETF) more than doubled from $12 to $26.
From there, we moved back to the low $20s and now we’re back up to $25. There was a short burst, which is when the Redditors now famous for sending shares of GameStop above $400, when it looked like a short squeeze for silver might also be in play.
At that time, I didn’t think we’d continue seeing further strength bumping the price of silver up into the mid-$20s. But now I tend to believe it’s setting up to continue to push higher.
Check out my video and let’s dive into my technical analysis, and why I see the potential for a short squeeze in the price of silver. Then share your thoughts in the comments below.
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