The time to buy silver is now.
In just over two months, silver prices have plummeted approximately
30 percent from their high. As a result, silver stocks have fallen
hard. The iShares Silver Trust (
) is off 28 percent since peaking in late April.
The commodities exchanges have increased the margin requirements
for speculators trying to buy silver futures. And silver prices
have been stagnant, trading range-bound ever since.
It seems as though everything is lining up for silver prices to
fall further. Yet, as a contrarian, it is under these conditions
where it makes the most sense to buy silver and silver related
That may seem to defy logic given silver is retesting its May lows.
But, remember back in late April when everyone was talking about
silver doubling by the end of the summer to $100 an ounce. Silver
was trading at a historical high and everyone, including myself,
was bullish on the precious metal.
***Today, we have almost the exact opposite condition in silver. As
a result, silver stocks are beginning to look attractive.
The RSI (14) is once again approaching its most oversold reading in
over a year. The last two times silver pushed to an oversold level
this low it rebounded almost instantly.
Of course, silver stocks can get more oversold, especially if the
overall stock market continues to suffer. In fact, the RSI (14)
indicator doesn't officially generate a buy signal until it dips
below 30. It could take a few more days for that to occur.
But there is no doubt that we are getting closer to
bargain-basement levels here for some of the best names in the
If you're a long term silver bull, (as I am) then you should be
looking at this underperformance in the silver majors as a buying
My colleague Jason Cimpl is taking advantage of this opportunity.
Yesterday, he released a brand new research report on the five
precious metals stocks to buy today. You can read all about this
report by clicking here now. It's called "Top 5 Gold and Silver
Trades for Summer 2011."
Jason is a technical analyst by trade, and he's looking at gold and
silver on that basis. He thinks precious metals stocks will
outperform for the rest of the summer.
For me, I think that anytime you can buy the largest "blue-chip"
type companies in a given sector at a discount to their fundamental
trend, you should back up the truck. And my long term thesis is
that gold and silver will likely double or triple in price before
this bull market in precious metals is over.
So the wind is at your back, and with Jason's technical prowess,
you know you're getting a good buy price.
I hope you'll take a look at Jason's research. It's the type of
to-the-point investment research that can really cut through all
the noise in the market.