August 4, 2009: Silver has hit resistance but the uptrend is still intact. We look at SLV, the silver exchange traded fund, to play the metal.

Let us look at the chart of SLV:

• The uptrend shown by the white upwardly sloping line is intact. The trend line has more than three touches, which confirms the up trend. Also note that the trend line is drawn from the gap up area that started the new trend.
• SLV hit resistance and pulled back. The areas shown by the horizontal red lines are resistance areas and those shown by the yellow lines are support areas
• We'd wait to enter the up trend if SLV pulls back to one of the support levels with a stop loss below the next lower support level.  We'd also buy SLV if prices touched the white trend line
• We might even short SLV to make some quick profits

Caveats:

Note that prices may not respect the support lines and continue lower, leading to losses on the long positions. The same holds true for shorts as prices can break out of resistance areas.

Chart Analysis: 

Silver hits resistance