Silver Wheaton Corp. trading in a range

Mar 23rd, 2015 – Comment

The momentum indicators signalled a buy at $23.00 and are currently suggesting that investors can expect more buying in the near term.


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SLW LOGO

Hi Lou,

I listen to all your updates on AM640 and I am appreciative of all the topics you cover.

I’m hoping you can do an analysis on Silver Wheaton Corp. I own shares of SLW and would like to know your thoughts on this company for a long position.

Thank you,
Anthony

 

Hey Anthony,

Thanks for the assignment and for your support. This will be the fourth time that I review the case for  Silver Wheaton Corp. (SLW TSX) since 2010. The last time was on March 11, 2013 when the shares were trading for $31.73. Bob wanted my view of the stock and the research unearthed a number of patterns that needed to be added to his evaluation. The shares had been selling off and needed to hold support at $31.00. The MACD and the RSI were gently turning higher but it was advised that SLW needed to build a base if it wanted to make a case for a longer term investment.

Unfortunately SLW could not hold support at $31.00 and traded as low as $18.59 by late June of 2013. Another scout of the charts will help identify if the stock exhibits enough positive patterns to justify putting your hard earned capital at risk.

 

SLW

The three-year chart outlines a trading range that has been established since the June 2013 low. There is resistance at $30.00 and support near $23.00. SLW has oscillated through the range four times since 2013 providing multiple opportunities to trade for profit. In October of 2014 the MACD and the RSI both signalled a buy as the stock touched a 52-week low of $18.92. The run to resistance near $30.00 by late January 2015 was concurrent with sell signals from the MACD and the RSI as the shares became overbought.

 

 

 

 

 

 

 

 

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The six-month chart illustrates the lift off the 52-week low in late October which got the stock moving higher to near $30.00 by late January 2015. The retreat to support at $23.00 by early March was followed by a rise to resistance at $25.00. The momentum indicators signalled a buy at $23.00 and are currently suggesting that investors can expect more buying in the near term.

SLW is a trading stock. The best way to manage these shares is to trade them in the range and watch for opportunities arising from breakdowns and breakouts.

Next time I will inspect the charts of Labrador Iron Ore Royalty Corp. (LIF TSX) for Gordon

Make it a profitable day and happy capitalism!

 

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