silver is set to explode, page-17

Augurs well for first Qtr 2011...

Silver Bulls Powerful; May be Much More Upside Price Potential

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The March Comex silver futures contract this week hit a fresh three-week high of $28.88 an ounce. The silver bulls have gained good upside near-term technical momentum recently and prices are now within striking distance of strong technical resistance at the November high of $29.405, which is also a 30-year high.

A close above the November high in March silver would find the bulls nearly immediately challenging major psychological resistance at $30.00 an ounce. There is a longer-term technical resistance zone located in a price gap on the monthly Comex silver chart between $29.00 and $30.00. A push above that would also be longer-term technically bullish.

Importantly, there are no early technical clues to suggest a near-term market top is close at hand for the silver market. That means the path of least resistance for silver prices remains sideways to higher.

To begin to produce some significant near-term technical damage to begin to suggest a near-term market top is in place, March silver futures would have to drop below the last strong "reaction low" on the daily bar chart, which is presently located at the mid-November low of $25.05 an ounce.

From an important longer-term technical perspective, the monthly continuation chart for nearby silver futures reveals that prices have been trending sharply higher for two years. Also, silver futures prices are nowhere near the all-time record high north of $40.00 an ounce that was scored in 1980.

With gold prices having just scored a new all-time record high and with silver futures prices still not even close to the all-time high, many investors reckon silver futures are still a buying opportunity with still more upside price potential in the coming weeks and months.

It would take a drop in nearby Comex silver futures prices below strong longer-term technical support at $24.00 to produce some significant longer-term chart damage to begin to suggest the major bull market run has run its course.