Catch 'a falling knife' and buy silver: Trader

Silver has gotten smoked, losing more than 10 percent of its value in a nearly unremitting drop over the past 2 ½ weeks. But that might present nimble traders with an opportunity to play for a bounce, according to investment advisor Neil Azous of Rareview Macro.

In what he calls a "catching falling knives trade," Azous said Thursday on "Trading Nation" that "silver is an opportunity here to play for a tradable bounce."

One shouldn't mistake Azous for a silverbug. In fact, he wrote in a Thursday note that "commodities as an asset class remain badly impaired, and the bias towards even lower prices remains firmly entrenched for fundamental reasons."

However, "along the timeline to lower prices there will be tactical long opportunities," Azous said. "Today may be one of those."

Read MoreGold eyes fourth weekly loss as investors count on Fed rate rise

Falling knife
Notorious91 | Getty Images

Andrew Burkly, head of portfolio strategy at Oppenheimer, agrees that "as a near-term trade, I think it's probably a good idea. It's kind of down near the low end of the range, and we'll probably get a bounce in the range we're in."

Still, "you don't want to hold it too long because longer term, I think the dollar's going higher, which will hurt some of these commodities," Burkly said Thursday on "Trading Nation."

Commodities tend to trade inversely to the dollar, since as the greenback increases in value, it takes fewer dollars to buy the same amount of a fixed asset. The U.S. currency's recent strength has contributed to commodities' weakness.


Trades to Watch

Trader Bios


Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more