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Catch 'a falling knife' and buy silver: Trader

Contrarian case for silver

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."

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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.