Conclusion, Investment Implications, Strategy

The iShares MSCI Global Silver and Metals Miners ETF (SLVP) is amid favorable conditions to continue its recent outright price advance amid relative outperformance versus the S&P 500.  We are targeting an additional 15% rise to 11.13 that will remain valid above the 9.06 area.

Analysis and Rationale

The iShares MSCI Global Silver and Metals Miners ETF (SLVP) generally will invest at least 80% of its assets in the component securities of the underlying index and in investments that have economic characteristics that are substantially identical to the component securities of the underlying index. The index has been developed by MSCI Inc. (the “index provider” or “MSCI”) to focus on approximately 25 companies in developed and emerging markets that are involved in silver mining or exploration. The fund is non-diversified.

The upper panel of Chart 1 below plots SLVP daily since April along with its 200- and 50-day moving averages, widely-watched major and minor trend proxies.  The lower panel plots the corresponding daily relative performance of SLVP versus the SPDR S&P 500 ETF Trust (SPY) along with its 63-day moving average, which we use to identify the Strategic trend of relative performance.

Chart 1

The green highlights in the upper panel point out that SLVP is starting to edge above its 50-day MA, indicating an emerging minor bullish trend change that started in early October.  These conditions suggest a relatively low-risk opportunity to buy SLVP and silver mining-related assets following a significant decline since the 2nd Quarter.

In addition, the green highlights in the lower panel of Chart 2 below show that the total net assets invested in SLVP shifted to a new trend of monthly expansion on Sep 30th and that this trend appears to be resuming after being successfully tested on Oct 14.

Chart 2

As long as these assets remain in monthly expansion, the recent rise in SLVP is likely to continue.

Our Updated Sectors & Industry Groups Table

Table 1 below is an updated version of our Sectors & Industry Groups Table, which is always Table 2 of our Monday morning Keys To This Week: Market Sectors & Industry Groups reports.

Table 1

It lists SLVP at the top as the newest of these ideas and shows an 11.13 upside target, 15% higher than where it’s currently trading.