Since July 19 when they hit $17.96 a share, Silver Wheaton (NYSE:SLW) has pushed up strongly to close at $22.84 on Friday. Silver prices were just over $19 at 6:00 PM EDT Friday.
The question is how long can they continue upward based on silver demand and the faltering economy.
There are a couple ways of looking at it. Some feel bulls could still take advantage of the momentum Silver Wheaton is enjoying, and after a slight pullback, which could be considered a place to enter, the company has a good chance of moving up even further.
Another viewpoint is silver prices will be moving up and down for the rest of 2010, with an average of $19.20 an ounce to $20 an ounce in through the end of the year.
Based on today's price and assuming the behavior of the share price of Silver Wheaton remains as it has been, it does give some leeway for the share price of the company to move up, confirming the possibility there is more room to increase before pulling back to support levels.
It seems the economic conditions will have to improve before industrial demand for silver grows, so there should be a ceiling in the short term if nothing changes there, although the pure investment side of silver could drive it up outside of demand, which we'll have to wait and see if it moves in unison with gold and is considered a secondary source of safety.
If that's the case, the rules of gravity will be suspended and it could be an interesting ride if it indeed does take off. There's no doubt if silver prices do take off, Silver Wheaton will be taking off with them.
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