PSLV Update – 25 May

Another very strong day for the real and 100% allocated silver bullion fund, PSLV, as it closed up 4.73% on the day. So my trade of yesterday is already in the money by almost 5%. The beauty of this story is that the technicals are just getting started and are a long way away from extreme conditions. Resistance has yet to be tested and waits just cents above the current price. For the fourth day in a row, price has closed at or near the high of the day. Today price sliced through the 18 day moving average and other than the resistance at 17.81 there really isn’t much to point to on this chart for resistance. Perhaps the Bollinger band, but it is all the way up at 20.92. I think in a situation such as this it is constructive to take a larger view and look for natural Fibonacci levels that will attract price action. We have two gaps on the chart now that definitely will fill. Neither gap was on big volume so there isn’t a lot of smack behind the move, more like a steady grind. A good move may be to buy in the gaps during a pullback.

As we can see from the longer term chart, price has cut through the Fibonacci 50% level and is heading higher. There is no real price levels corresponding to swing highs or lows between 17.81 and 23, but the Fibonacci 38.2% level is present at 18.62. It is here where we can expect some natural resistance.

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