Silver Futures—Silver futures in the December contract is trading slightly higher for the 3rd consecutive session up another $0.20 at 24.90 an ounce looking to break out to the upside in the coming days ahead. The chart structure is starting to improve on a daily basis therefor the monetary risk will start becoming more in your favor next week as I will be recommending a bullish position if prices close above the 25.71 level while then placing the stop-loss under the September 24th low of 21.81 as an exit strategy.
The risk on that trade would be around $20,000 per large contract, however the risk on a mini contract would be $4,000 plus slippage and commission as silver is an extremely high-risk trade as the contract is extremely large controlling $5,000 ounces or 1,000 ounces on the mini contract. Fundamentally speaking support from a weak dollar and optimism U.S lawmakers will agree on a debt-fueled pandemic stimulus package is adding support in the short term.
The chart structure is starting to improve on a daily basis therefor that tremendous risk will be reduced so be patient and wait for the breakout to occur as that could happen tomorrow or it could happen in 2 weeks as the precious metals across-the-board look strong today and look to move even higher. Silver prices are trading above their 20 and 100 day moving average as the trend is higher although we have been stuck in a 4-week consolidation pattern, but I don’t think that situation is going to last much longer so look to play this to the upside.
CHART STRUCTURE: IMPROVING
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