It is no secret: we are bullish silver in 2023. The pullback that’s currently underway is not going to change our mind, on the contrary, it will ultimately improve the bullish pattern. About a month ago, we reported that Silver Miners To Silver Price Ratio flashed a long term buy signal. We also confirmed our Bullish Silver Stocks Outlook For 2023 and we were more specific to call out that Junior Silver Miners Will Have An Amazing 2023. That said, one month into 2023, how are junior silver miners doing currently and is our bullish stance still justified?
The short answer to the last question is ‘yes, our bullish stance is still justified’.
On the one hand, we expect a pullback in the price of silver, as said in Silver – Here Is Why February 15th, 2023 Matters. Based on the data at hand, we expect a mild pullback, not a severe pullback like last summer.
On the other hand, the long term silver junior mining ETF chart, SILJ, still has this very long term bullish setup that we spotted in our previous writings. Truth to be told, the probability of this bullish setup to be invalidated is very low. We have to start a really bad era in markets, not just precious metals, for this long term setup to break.
Silver miners have consolidated lately, there is not a lot sensation in this sector, not yet. We believe it is underway, particularly as soon as 12 points in SILJ will be cleared on 5 day closing basis.
What may seems as ‘boring’ period on this SILJ chart is in reality a ‘base building process’. The longer the base, within a range defined by solid support, the more powerful the foundation for the subsequent trend. As said, Silver Miners Flirting With Secular Support, Tremendous Upside Potential In 2023 which has not changed so far, on the contrary. We expect the trend in junior silver miners to be higher, the current base building process is required to gather sufficient energy to clear the green falling trendline and also 12 points.
We continue to believe that, ultimately, the top of this long term channel will be touched. That’s not in 2023 but within a period of one or two after. The big breakout of silver which we expect to happen sooner or later will be instrumental in leading silver (junior) miners higher.
In our Momentum Investing service we published a special edition on silver and silver stocks on Dec 2nd The Silver Market Long Term Very Bullish. Our Silver Mining Top Picks. It is still relevant, not a lot has changed in the silver sector lately. Our special edition is accessible in the restricted area.