In late 2025 and early 2026, the price of precious metals soared to incredible heights.
One of the most impressive moves came from the iShares Silver Trust (NYSE: SLV). The price spiked 154% in a 3-month period ending January 29.
A few months later, this ticker is back in play.
I’m eyeing a specific trade on SLV…
The silver surfer is back!
Parabolic moves like SLV can seem like random volatility. But when stocks move with that level of hype, the patterns can actually become clearer.
The reason why: people are predictable during times of stress. Like when a traditionally lazy precious-metals stock spikes +100%…
The chart is a physical manifestation of human emotion in the market.
Once you recognize the pattern, you can apply it to every oversized spike in the market.
This is the pattern for volatile stocks.
Central Banks Lit the Fuse
It wasn’t just silver. Gold spiked at the same time.
Central banks bought gold hand over fist, stacking up more than 860 tonnes in 2025. For the first time in decades, gold passed U.S. Treasuries as the planet’s go-to reserve asset.
The dollar was sliding, geopolitical landmines threatened to derail the economy, and everyone was looking for a haven.
Gold prices blew past $5,000 an ounce for the first time in history last January, peaking near $5,600. The metal gained 64% in 2025, its best year since 1979.
Then silver grabbed the baton…
Silver is gold’s wild younger cousin. The cheaper asset appealed to degenerate traders who couldn’t afford gold. Plus, utility demand spiked due to its use in tech.
The world was burning through more silver than it could dig out of the ground. We’re talking about five straight years of supply deficits before this move.
Solar panels, electronics, and AI data-center buildouts were draining warehouse inventories faster than miners could refill them.
As a result, silver’s run put gold to shame.
The metal smashed through $50, a ceiling that had held since 1980, then ripped all the way to an all-time high of $121.62 on January 29.
You can see the exact day it topped out on the chart below. SLV tagged $109 at the same time.
Silver was the biggest trade in the market, and everyone piled in.
Ultimate greed pushed the asset to the top… then the music stopped.
The same crowd that chased silver to the highs bolted for the exit once the chart couldn’t continue running.
Since the January spike, SLV has bled lower month after month. Now it’s sitting more than 50% off the highs. And I think the pendulum has swung too far…
The Silver Surfer Rides Again
SLV just dropped more than 9% in a single session. It’s down to the $50 range.
Look at where it’s trading against the moving averages:
- The 50-day sits at $67
- The 100-day at $69
- The 200-day at $62
The SLV share price is stretched far below all three averages.
The rubber band is pulled to its limit.
Then there’s the RSI.
It’s my favorite confirmation tool. The RSI measures momentum on a scale of 0 to 100. A reading under 30 means the asset is oversold and sellers are running out of ammo.
At the current levels, SLV’s RSI is at 25…
I’m not chasing this drop lower. I like to play the bounce off of the extremes.
Here’s the trade I’m taking:
Buy the SLV July 1, $53 Calls for a swing trade.
A call contract will gain value as SLV climbs higher. And with short-dated contracts, my position can gain more than the actual asset. All while my risk stays capped at the cost of the contract.
That’s the beauty of options trading. We can take advantage of the same price action, make larger gains, and define our risk from the beginning.
If the SLV is still trading near the lows, you’ve got time to make this trade. Otherwise, file this pattern away.
It’s not the last time we’ll see a setup like this.
Stay Street Smart,
Jeff Zananiri
*Past performance does not indicate future results, Not typical.
