Silver Wheaton Corp. has a CRA problem to add to weak silver prices

Jul 10th, 2015 – 1 Comment

At best we might get a trade but there isn’t a lot of evidence that we can expect a trend reversal.


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


Read the author's full profile.


Further Research

Read more about Precious Metals.


SLW LOGO

 

Hi Lou,

Hope all is well. Can you analyze Silver Wheaton. I bought the stock at $23.20. It was on the low side of floor which is $23.00 and now wondering if it is going to be coming back up in the near future….?

Thanks for your feedback…..Cheers.

Regards,
Sam

 

Hey Sam,

Thanks for the assignment. This will be the fifth time since 2010 that I have examined the charts for Silver Wheaton Corp. (SLW TSX) . The last occasion was on March 23, 2015 when the shares were trading for $25.48. Anthony wanted my thoughts on the stock and the research indicated that it was trading in a range. What was identified that there was support at $23.00 and resistance at $25.00. It was advised to trade the shares in the range until there was evidence of a breakout or a breakdown.

The shares oscillated through the range twice by the middle of May but then they started meeting resistance along the 200-day moving average and by June support at $23.00 was breached. In early July stock was caught in a Canadian Revenue Agency probe of the tax years 2005 through 2010 which sent the value down to under $20.00.

An inspection of the charts will help identify the potential for a trend reversal.

 

SLW

The three-year chart depicts the range bound pattern with support at $23.00 and resistance at $30.00 that dominated the stock from August of 2013. The pattern continued until  February of 2015 when a tighter range was formed with resistance at $25.00 and support at $23.00.  In April a bearish crossover surfaced informing investors that they could expect increased selling pressure to come into play.

 

 

 

 

 

SLW2

The RSI on the six-month chart indicates that the shares are now slightly oversold and that we need to monitor the shares closely for signs that buyers may be ready to step up at these prices. The oversold situation might get the stock moving but we can’t ignore the downtrend and the resistance along the moving averages. At best we might get a trade but there isn’t a lot of evidence that we can expect a trend reversal.

SLW needs a healthy increase in the price of silver to set an uptrend in motion. Unfortunately there is scant evidence we can expect higher silver prices in the short run.

Next time I will inspect the charts for Pep Boys – Manny Moe & Jack  (PBY NYSE) for Jeff.

Make it a profitable day and happy capitalism!

 

 

Categories: Precious Metals
Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media