Don't Ignore This Chart

Silver Surges out of Bollinger Band Squeeze

 | 

Industrial metals surged on Wednesday with 2+ percent gains coming in silver, aluminum, palladium, copper and nickel. The Silver ETF (SLV), in particular, finally broke out of a two-month consolidation.

The chart below shows the Silver ETF (SLV) with Bollinger Bands in pink and BandWidth in the indicator window. Overall, SLV has been stuck in a large trading range the last 12 months. With today's move, the ETF surged off the mid-point of this range and the cup is now half full. 

The Bollinger Bands narrowed in early March and remained tight into April. Notice that BandWidth dipped below 4% in early March and just now moved above 4%. The narrowing reflects a volatility contraction and such contractions are expected to be followed by a volatility expansion, which is happening now as the bands start to widen again.  

The breakout is clearly bullish and the breakout zone in the 15.8-16 becomes first support to watch should we get a throwback. Measuring upside targets is tricky business, but a measured move would targets a move to the 17-17.2 area. The December-January advance was around 13% and a similar move could occur from the March low. 


Plan Your Trade and Trade Your Plan.

- Arthur Hill, CMT

Senior Technical Analyst, StockCharts.com

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill


Enjoy this article? Hear more from Arthur Hill at

August 10th & 11th, 2018


See how the experts are protecting themselves from market volatility and reducing risk in uncharted waters

Join us online this August for two full days of investing insights, charting wisdom and market commentary from the industry's leading technicians. Streaming live wherever you are, you'll learn exactly how the experts are navigating the market's changing tides and remaining profitable in all conditions.

Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
Subscribe to Don't Ignore This Chart to be notified whenever a new post is added to this blog!
comments powered by Disqus