I often get ask, "What does an ideal Power of the Pattern set up look like?" For us an ideal set up has these common features: Support/channel lines come into play, along with a Fibonacci support/resistance level and a bullish or bearish wedge pattern is near completion.
When it comes to ideal pattern set ups, it didn't come much better than what presented itself 20-days ago. We started sharing two years ago that Silver could reach the $15 level, which would present a good buy point (see post here)
After waiting over two years for Silver to near the price zone ($15) that interested us, Silver Wheaton (NYSE:SLW) created what looked like a nice set-up that we couldn't pass ignore, as it was hitting channel and Fibonacci support at the same time. A bullish descending triangle was about to end at (1) above, with few investors bullish Silver at the time.
Members picked up SLW 20-days ago due to this set up and since then a nice then break out and a nice gain have taken place. (SLW is up over 20% more than SPY) in the past 20-days).
Is it too late to get in on this trade? A very nice risk/reward entry point did come into play on 11/6. One thing that does stick out is this: Sideways channel resistance comes into hand around the $27 level, which is still a large percentage above current prices.
Last week I shared the "Monthly Silver" chart above, discussing that a bullish wick could be forming at dual support and the 23% Fibonacci support level. The month is not over with at this time. Should Silver end the month higher than it closed last night, it would appear that a bullish wick on a monthly basis took place at key levels.