Have we missed the silver boat?

I have people asking me if they have missed the silver boat. Some wonder if they should jump on the boat now before it is too late. Well, I cannot and would not stop them from jumping on the boat now if they so wish to. Who knows? Silver could go higher in the next few weeks without weakening although I rather doubt it.

 On 18 March 2011, not too long ago, I actually said that "Technically, silver has tested the 20dMA which is now at US$34.22.  So, for anyone who would like to start a long position in silver and is afraid of missing the boat, initiating a position here could be a good idea. Buying at supports in an uptrend is conventional wisdom." Read blog post here.

For anyone who bought some then, they would be in the money now. Of course, there was no way I could guarantee that silver would go higher then. It could have weakened further to test the 50dMA or even the 100dMA which it did a few months ago. However, buying at supports in an uptrend is conventional wisdom.

What I have observed is that silver's corrections are getting shallower. This is normal in a very bullish scenario. However, this is not normal given a longer time frame. What am I trying to say? I think that a deeper correction is on the cards and it is just a matter of time. Always remember that prices do not go up or down a straight line. Prices climb a wall of worries and there will always be times of weakness. Again, in an uptrend, we want to buy at supports.

Silver is now trading above US$40 an ounce, a heady figure, and I believe that silver is going to US$50 an ounce probably sometime this year. Indeed, my earlier research suggested that US$80 an ounce is not far fetched. If you have not read my blog posts on the silver and gold ratios, here are the links:

1. Gold or silver?

2. Buy more silver on weakness.

Where are the supports now if we should buy at supports? This is where we look at the charts. Silver is currently at US$40.27 /oz:

Looking at the technicals, silver's price has formed two spinning tops as it pushed higher. The MACD, a momentum oscillator, is lower than in early March although price is higher now compared to that time. A negative divergence is an early warning on possible weakness. Price could continue to move higher but we can be sure that momentum is now weaker.

Where are the supports now? 20dMA is at US$36.89, 50dMA is at US$33.79 and 100dMA is at US$31.17. Good luck to us all.