SVM: Silver the metal has been basing around 26.70-27 since early July. SVM has formed a similar pattern and created a strong base at 4.96-4.89. SVM has also found its self in a tight range, between its base at 4.96 and resistance at 5.30. Over the last two days SVM has failed at resistance and moved backdown to its base. The pattern here is for SVM to again test the top of the range at 5.30. A breakout of this range would be bullish for the stock and potentially send SVM to 6. For support SVM has to stay above 4.96 but most importantly above its swing low at 4.89. With the market selling off the fear trade of getting long silver and gold may start to kick in and Silver could get a bid behind it and help move silver related stocks upwards.
The Trade: This trade is simple, long SVM near 5-4.96 and with stop below 4.89. The price targets are 5.30 and 6. It is a very low risk, high reward trade.