After a strong start to 2016, silver prices will continue to rise, according to one technically minded trader.
"What was resistance becomes support," Todd Gordon said Friday on CNBC's Trading Nation when discussing the ETF for silver futures, the SLV. "We are free from the ceiling and ready to move higher."
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Gordon connected the highs for the SLV dating back to April of 2012 and noted that recent gains have taken the ETF well above downtrend resistance. The metal's futures price is currently up 24 percent year-to-date and the SLV is up 23 percent in the same time period.
The founder of TradingAnalysis.com also pointed to demand for silver out of China, as well as a falling U.S. dollar, when discussing the key drivers for silver's potential. On a weekly basis, Gordon examined a likely reversal following an inverse head and shoulders pattern dating back to last summer.
"We are fulfilling what you would expect to see, which is a break from the head and shoulders pattern," said Gordon, who added that the floor formed off of the two most recent highs will serve as a launch pad for SLV prices heading into May.
From here, Gordon is looking to the options market to establish a bullish position by selling puts in an environment with elevated volatility.
"When volatility is expensive, both puts and calls are also expensive," said Gordon, when discussing his rationale. Gordon's move calls for selling the SLV June 15.5 puts for 35 to 36 cents, as 15 is right along the breakout level, which should hold as support.
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