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Is the worst over for silver? From a
technical standpoint, both the Comex futures and
Silver Wheaton shares have done exactly what we might have expected of them
if they were carving out a durable bottom. On Monday, the mining stock came
with a single penny of a 27.97 correction target where we’d told
subscribers to get long using an 8-cent stop-loss. Then, yesterday morning,
May Silver futures trampolined from a low that lay
just 1.5 cents from a correction target also identified using Hidden Pivot
analysis. In both instances, powerful rallies began from within a hair of the
targets, raising the odds that an important low is in. Our 29.940 price
objective for the May Comex contract was flagged
three weeks ago when the futures were trading above $31 an ounce.
Yesterday’s explosive bounce from 29.925 carried them all the way to
30.740 — an 81-cent surge that would have been worth $4000 to any
trader lucky enough to have caught the entire ride.
 
As for Silver Wheaton, subscribers have
been instructed to hold onto half of any shares they may have bought when the
stock bottomed Monday at 27.96. Yesterday, tracking the ballistic move in bullion
futures, Silver Wheaton traded for as much as 29.79. That represents a gain
on paper of more than 8% in less than a week, since subscribers were told to
take a partial profit near 28.61. With our cost basis effectively reduced to
27.47, we can afford to let our profits run. But will the move continue?
It’s impossible to be sure. However, based on the energetic leap that
these two silver vehicles have taken so far, we are encouraged to hold onto
at least a small portion of our original position in Silver Wheaton for a
potential four-bagger. We should note in the meantime that the stock is not
yet out of the woods, technically speaking. By our Hidden Pivot runes, SLW
will need to rally a further $2.44, topping a peak at $32.20 recorded on
April 12, to turn the daily chart decisively bullish for the intermediate
term. At that point, we’d say there’s at least a 40% chance that
the correction begun almost exactly a year ago is over.
***
Information
and commentary contained herein comes from sources believed to be reliable,
but this cannot be guaranteed. Past performance should not be construed as an
indication of future results, so let the buyer beware. There is a substantial
risk of loss in futures and option trading, and even experts can, and
sometimes do, lose their proverbial shirts. Rick's Picks does not provide
investment advice to individuals, nor act as an investment advisor, nor
individually advocate the purchase or sale of any security or investment.
From time to time, its editor may hold positions in issues referred to in
this service, and he may alter or augment them at any time. Investments
recommended herein should be made only after consulting with your investment
advisor, and only after reviewing the prospectus or financial statements of
the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from
its subscribers for marketing purposes. All names will be kept anonymous and
only subscribers’ initials will be used unless express written
permission has been granted to the contrary. All Contents © 2012, Rick
Ackerman. All Rights Reserved.www.rickackerman.com
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