Why I'm More Bullish on Silver than Gold

Silver is definitely looking more bullish than Gold these days. Whereas most Gold stocks are breaking downtrends, many silver stocks are looking like they are getting ready to break out to new highs, which portends greater potential for gains in the near future.

I'll definitely be overweight Silver in the coming couple of months. The only Gold plays that I really like right now are AUY, AEM and GSS, and the latter is always a bit of a question mark.

Anyway, check out the Silver Stock charts below:

Comments: After underachiving for so long, HL looks like it's getting ready to retest and probably break the April highs. Although it's not the most pure Silver play, HL nevertheless billed itself as the lowest-cost primary silver producer in North America in 2005.

Comments: The only publicly traded company with 100% of its revenues from Silver, SLW also looks like it's getting ready to retest its all time highs after getting temporarily beaten down on the news of GG's sale of a portion of its SLW holdings. Since GG continues to be a major SLW shareholder, there is some possibility that this news might create a perception that there is some share overhang from possible future share sales by GG. However, GG stated that it has no intention of selling more SLW shares in the near future and, in any case, the past sale was a private one to investors off the market, so I don't think this will be a major issue.

Comments: Although not quite yet ready to challenge the April highs, PAAS is breaking out of a 5 month consolidation base and has topped its September peak.

Comments: SSRI has been coming out with lots of good news recently and has overtaken SLW as the silver play of choice, at least for now. It made a breathtaking move soaring to all time highs above an ascending channel line on Friday following heavy accumulation.