Taking Stock Of Silver Stocks

Michael Noonan: We are of the simple opinion that any substitute for the real thing is never as good a choice as the original, even when it comes to Precious Metals.  There are so many other considerations that enter the picture when regarding mining stocks.  One of the primary ones is management, what it can do to a stock’s performance separate and apart from its underlying purpose, silver production.  There can be poor management, mismanagement, decision-making related to stock performance instead of getting the maximum performance out of its mining operations, overspending, misspending…you get the idea.


Here is a reading of some of the top silver mining companies from a chart perspective. Charts show the best bottom line results from all observations one can make in an assessment of any company.  While we see it as a way of cutting through everything else, this shortened version of viewing a company from a purely results-oriented perspective, via reading a chart,  should not be quickly dismissed.  In fact, from this kind of look, one might more easily see the value in dismissing some of the stocks as buy candidates.


Another important consideration to be held in mind is to always buy strength over weakness.  Do not buy a stock because it is low, and you think it may rally and play “catch-up” with the rest of the market.  There are very valid reasons why any stock is weaker, relative to other companies in the same sector.


In no particular order:


However one wants to view (NYSE:SLW), the performance is slightly weaker to the metal itself. It is a positive that the last sell-off has taken 17 weeks to retrace the prior 9 week rally. The last 4 weeks on the chart show a clustering of closes.  A clustering denotes balance between the efforts of buyers and sellers.  From balance comes unbalance.  A look at the daily chart may give a hint as to which way the unbalance will go.


SLW W 5 Feb 14


It seemed a little more  positive on the weekly as the daily chart shows issues for buyers to overcome more than for sellers.  The arrow points to an ease of movement lower, 8 TDs ago, [Trading Days].  Buyers have not been able to regain ground lost in a single day over the next 7 TDs of effort.


The position of price, under a 50% retracement, is relatively weak.  It does not mean that buyers cannot overcome resistance, but they have to put in a better show, now.


SLW D 5 Feb 14


We do not show the 50% retracement area for (NYSE:PAAS), but it is apparent from the eye that price is not even close.  The gauging of how price is, using a 50% mark, is a general guide that demonstrates overall weakness, being unable to rally to that level, or strength, when price can rally to, and even exceed a half-way retracement.



(...)Click here to continue reading the original ETFDailyNews.com article: Taking Stock Of Silver Stocks [Silver Wheaton Corp. (USA), Hecla Mining Company, Coeur Mining Inc, First Majestic Silver Corp]

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