SLV – The Bigger Picture

I’m not big into counter trend trades which I’ve stated before, but when I see a major support decision on a WEEKLY chart I start to pay attention.

I’m seeing this in SLV (I-Shares Silver Trust, $ 21.53, off $0.08). right now.  On the weekly chart I’m seeing a very important support decision coming up at the 18.71-19.96 area.  I’m also seeing that the last low in this one was made on top of a key price EXTENSION at the 20.88 area.

So if we think SLV may bottom soon against these support parameters, could there be some options strategies to use?  Yes, but for the time being, let’s watch.  Below $21 let’s watch closely.  SLV has Weekly’s Options and also has 0.50 point strikes above $20.  SLV also has expiration’s every month through October, so the choices will be many.  Below $21 consider buying a ~60-day 21-strike call.

CB slvweekly
Our max risk can be defined below the low end of the cluster at the 18.71 area.   If the 23.70 swing high is taken out, I think any rally we may start to see would accelerate at that point.  Let’s see if price continues to hold above the support or not and trade accordingly!!