Shorting More Silver

Here’s a quick update on silver. Since I shorted at $30.9 two weeks ago (see below post), silver made a low at $28.3 but bounced back, closing today just below $30.

I am sticking to the view that silver is in a medium term correction/consolidation, and therefore I see this rebound (right shoulder) as an opportunity to increase my short position. I’ve been hoping to see some clearer topping patterns to form in silver (to help generate more downside interest/momentum), specifically a head and shoulder (see below chart), so this rebound was somewhat expected (which also gives comfort in setting relatively tight stops).

Although I had to give up some profits, if this head and should pattern plays out as expected, it will certainly boost my confidence (and profit) level wrt my short position.

..doubled my short position at $29.7 (avg cost is $30.3).

[Silver COMEX MAR'11: 1-month]