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Shine on Silver Miners ETFs


Exchange traded funds holdings shares of gold miners, both large-caps and juniors, have received ample fanfare this year and deservedly so.

Year-to-date, the Market Vectors Gold Miners ETF (NYSArca:GDX) is up 20%, a gain that looks paltry compared to the better than 32% return posted by the Market Vectors Junior Gold Miners ETF (GDXJ) .  Both ETFs rank among the 10 best non-leveraged ETFs in 2014. [Good News for Mining ETFs]

Buoyed by the resurgence of their gold mining counterparts, silver mining ETFs have gotten in on the act as well, a not affirmed by the fact that the PureFunds ISE Junior Silver Small Cap Miners/Explorers ETF (SILJ) is this year’s best performing non-leveraged ETF with a gain of nearly 43%. The Global X Silvers Miners ETF (SIL) is no slouch, having returned more than 26%. [Silver and its Miners Soar]

On a technical basis, SIL and SILJ demand, closer and immediate attention.

“Pride of opinion has destroyed more careers than probably anything else. Lets face it, bias can be cancer. This group has been torture to those trying to pick bottoms over last year or so, but now looks to want to at least bounce,” according to Captain John Charts.

As Captain John Charts points out, SIL is breaking above resistance caused by a downtrend line that dates back to 2012, a similar pattern to what was recently spotted with GDXJ.

Chart Courtesy: Captain John Charts

Captain John also highlights bullish charts for Silver Wheaton (SLW), Tahoe Resources (TAHO), Hecla Mining (HL) and McEwen Mining (MUX).  Those stocks combine for nearly a quarter of SIL’s weight.

Bolstering the outlook for SIL and SILJ is, of course, improving technical for silver-backed ETFs. Last Friday, the iShares Silver Trust (SLV) rose 4.2% Friday and crossed over its 200-day simple moving average. SLV is up 5.5% year-to-date. [Silver ETF's Bullish Technical Break]

Technical analysts point to a strong three-month base forming in silver’s trend line after the 2013 sell-off tested the 2009-2010 resistance level, writes J.C. Parets for The Exchange.