Chart Review: Silver Breaks Out

It took almost a month, but silver has finally joined gold in its post-Fed breakout. The chart below shows that silver has broken above stiff resistance at the 50-day moving average (DMA). This resistance has kept silver under a lid for five months.


Silver breaks out
Silver breaks out

Source: StockCharts.com

With the Federal Reserve promising to keep rates low through 2014, gold and silver have been given free license to roam free for an extended period of time. Silver is already up 25% for the year, but it is also 30% off its highs. So while it made more sense to buy when silver was beaten up, I still think buying into this breakout will provide sufficient rewards this year (and beyond) for the risks.

Be careful out there!

Full disclosure: long SLV, GLD

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