I mainly trade crypto currencies but also trade other markets like stocks and commodities. Today, I want to look into one of the commodity ETFs - SLV (iShares Silver Trust).
Commodities are cheap now
As some of you may know, commodities are really cheap compared to the stock market. GSCI/S&P500 ratio is almost as low as ~50 years ago and Dot.com bubble. So, it seems like another cycle is coming soon and the stock price has been quite extended. Now, let's look for some investment opportunities in terms of technical analysis.
Silver ETF - looking cheap and risk and reward ratio is pretty good!
This is one of the great examples - SLV. Keep in mind that this is 'weekly chart'. Commodities usually move a lot slower than cryptos (cryptos are a lot more volatile as the market is still immature and the market cap is smaller).
You can see the price skyrocketed between late 2010 and early 2011 and crashed after that. The bear market continued for almost 5 years and the price is now at the same level as the pre-breakout and it's been forming a 'symmetric triangle', which is a consolidation pattern, for 2 years.
Break out or break down?
The symmetric triangles are usually continuation patterns but they can be reversal patterns.
If break down, the next important support is $12-13. If break out, the price could go skyrocket again although it may not reach the previous high. The price target could be estimated using fibonacci numbers, the hight of the triangle, or major resistance lines (and combinations) but it would be possible to reach $30 by the early next year.
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Disclaimer
I am not a certified financial advisor. This post is just my personal opinion and not financial advice. Please do your own research and do not trade just based on my posts.