Silver Setup

We've always had time on our sides
But now it's fading fast
--Orchestral Manoeuvres in the Dark

As the Fed signals that it has the market's back and stocks celebrate with daily record highs, I can't help but think the precious metals may be ready for an epic run. I particularly like silver as it is likely to outperform gold if things really get going to the upside.

ETFs such as SLV and CEF are ways to get exposure to the silver metal itself. There are also a few silver miners that act as leveraged plays on the underlying metal. Pan American Silver (PAAS) has long been my favorite name here. Over the past year, general malaise for silver combined with concerns about a big acquisition have locked the stock in a downtrend.

Price action has firmed recently, however, and put PAAS at an interesting technical juncture. The share price sits just below both the 200 day moving average and the year-long downtrend line. A small flag pattern also appears to be approaching resolution right around here.

Needless to say, breaking through these various expressions of resistance would be technically significant and bullish. I like this setup and will look to add to my position early in the week.

position in gold, silver, CEF, PAAS