Silver Trading Opportunity in PSLV: The ongoing selling in silver may be near completion and is providing a technical trade setup for trading silver via Sprott’s Physical Silver Trust, symbol PSLV (PSLV Chart Real Time). PSLV may be a good vehicle for trading in that the premium and discount inherent in the fund can exaggerate the emotional extremes and provide clues as to sentiment in the silver market for those with a contrarian streak.
Bullish Falling Wedge in Silver: PMBull previously illustrated the existence of a Bullish Falling Wedge in a weekly silver chart for SLV which had not yet broken out. This wedge was also forming the right shoulder on a bullish inverse head and shoulder pattern widely recognized in the silver trading community. The falling wedge failed to break out, yet may still remain valid, along with the larger Inverse Head and Shoulder pattern.
Here, we zoom in on a larger falling wedge evident on the daily PSLV chart. The technical picture is compelling, with a favorable risk-reward ratio. PSLV has completed 4 turns, so we are now looking for the 5th turn in this highly volatile and seemingly erratic environment.
This pattern and potential opportunity presents itself on the heels of an extreme low in the PSLV Premium over NAV. Since published, and in the face of further declines in the price of silver, PSLV has outperformed, with its premium rising to over 6% intra-day.