Scott Pluschau, Contributing Editor ETF Digest 07/20/2011
There is a classic trade set up in the Silver exchange traded fund, symbol SLV.
We had months of consolidation in silver and I have been sitting on the sidelines patiently avoiding random market behavior in this balance area. Two days ago there was a breakout, and now yesterday we had the gap fill, and throwback to the prior resistance area, which typically offers strong support. Buying SLV here at $38 offers a nearly 4 to 1 reward to risk ratio if you place your initial stop at $35.50, which is approximately halfway inside the prior consolidation area, and target the highs of $48. See chart.
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