Chart: Silver Wheaton (SLW) Could Crash Soon
I’m bullish on silver in the long-term. But the metal isn’t looking so good in the short-term. In fact, one of my favorite silver stock could crash in the next few weeks.
Silver Wheaton (SLW) is a great way to play the bull market in silver. The company has purchasing agreements that allows it to buy silver at a low fixed price and sell it at current market prices. That’s why so many analysts love this company.
But the chart doesn’t look good. I see a major Head and Shoulders forming in the weekly chart. Take a look below.
This is a very reliable pattern that indicated the end of an uptrend. We don’t have a confirmation of a Head & Shoulders yet. The price needs to close below $30 on a weekly basis for us to get a confirmation.
If that happens, the stock could drop all the way to $17, which is the minimum target projected by the Head and Shoulders. This is a drop of 45% from today’s price. So it’s definetly worth watching.
Even if you don’t own the stock, it’s worth watching. If this stock drops that much, it will indicate a major risk aversion sentiment. The dollar will be rallying in an environment where SLW is crashing.