Wealth Blueprint Letter | Posted April 28th, 2015
Pan American Silver Corp., together with its subsidiaries, operates and develops, and explores for silver producing properties and assets in Mexico, Peru, Argentina, and Bolivia. The company also produces and sells gold, zinc, lead, and copper. It holds interests in the Huaron, Morococha, Alamo Dorado, Dolores, La Colorada, Manantial Espejo, and San Vicente mines. The company was founded in 1979 and is headquartered in Vancouver, Canada.
Take a look at the 1-year chart of Pan (NASDAQ: PAAS) below with my added notations:
PAAS has formed a clear resistance at $9.75 (red). In addition, the stock is climbing a short-term, uptrending support level (green) over the last couple of months. These two levels combined have PAAS stuck within a common chart pattern known as an ascending triangle. Eventually, the stock will have to break one of those levels.
The Tale of the Tape: PAAS has an uptrending support and a $9.75 resistance level to watch. A long trade could be made on a breakout above $9.75 or on a pullback to the trendline. A break below the trendline support would be an opportunity to enter a short trade.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT