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AG Trade Setup & Entry

Although still above this insanely steep & over-extended uptrend line, I have enough confidence that AG (First Majestic Silver Corp) is poised for a drop of at least 20% that I will go ahead & add it AG an Active Short Trade here in anticipation of a break down & move to the 8.70 area. 8.76 is the sole target at this time with a suggested stop over 11.80.

AG daily May 20th

AG daily May 20th

A couple of points to note on this trade: First of all, shorting a stock that is still within a bearish pattern or above a key support level such as this uptrend line makes this an aggressive trade as does the fact AG has a history of very large price swings. As such, less aggressive traders might prefer to wait for a confirmed breakdown before establishing a position or pass on AG altogether. Also note that AG is a silver mining stock as well as a component of the active short trade on NUGT/GDX. As such, make sure to factor that in if already short NUGT or GDX as you will be increasing exposure to the same sector as well as the same stock.

May 20, 2016 11:44am|Categories: Completed Trades - Short|Tags: |15 Comments

15 Comments

  1. Profile gravatar of dan123
    dan123 May 20, 2016 12:16 pm at 12:16 pm

    Nice setup Randy, thanks

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  2. Profile gravatar of Drummonddrive
    Drummonddrive May 20, 2016 1:14 pm at 1:14 pm

    I’ve been looking at this one all week…..thanks for jolting me out of my paralysis. CDE (Couer Mining) is another one I’ve been looking at with a near vertical trend line and 300% gain since January.

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    • Profile gravatar of rsotc
      rsotc May 23, 2016 10:11 am at 10:11 am

      Agreed. Lots of steam to be let out of CDE if silver prices correct soon. Weekly PPO & RSI rolling over too.

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  3. Profile gravatar of tmeyaart
    tmeyaart May 20, 2016 1:17 pm at 1:17 pm

    looks great. Especially with a lot of weekly closes around 12 dollars. $12 looks like a tough wall to break through.

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  4. Profile gravatar of tmeyaart
    tmeyaart May 20, 2016 1:32 pm at 1:32 pm

    Silver down over 8% since April 29th while this stock is up a bit. You have to think that if silver doesn’t run up that this stock will follow its downward trend.

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  5. Profile gravatar of Gaucho
    Gaucho May 26, 2016 6:50 am at 6:50 am

    Hi yesterday undo part of the previous down.
    It is still below the stop of 11.80
    Regards

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  6. Profile gravatar of Gaucho
    Gaucho June 3, 2016 4:05 pm at 4:05 pm

    Hi Randy, today max was 11.79 (SLV is bullish also)
    Is the stop still over 11.80. Any review?
    Regards

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    • Profile gravatar of charlie
      charlie June 3, 2016 7:11 pm at 7:11 pm

      Hi Gaucho-
      I don’t know what Randy is going to answer about keeping the stop at just over 11.80 , but perhaps one might consider raising the stop to just over approx. 12.40 , as that spot would be the backkiss area of the underside of the rising trendline now . Just a thought . And , Randy, what do you think of that idea ? Good luck to you both !

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    • Profile gravatar of rsotc
      rsotc June 5, 2016 6:35 pm at 6:35 pm

      Yes, AG came within just 2 cents of hitting the suggested stop on Friday (any move over 11.80 which would be a print of 11.81). I’m going to leave the official stop as is but as always, that is just a suggested stop which may or may not be inline with everyone’s stop preference/allowance. As @charlie mentioned, AG might want a run at a backtest of the wedge but since it is such a steep wedge, even the initial backtest could come in much higher, even 10% or more above where the stock closed on Friday.

      I’ve been studying the charts for a while now, trying to find the most relevant developments in the markets to cover in an update & other than the major stock indices still struggling with those key downtrend lines that I posted on Friday, what stands out to me the most is the big pop in gold & GDX on Friday. Although such an explosive move is certainly bullish, here are my thoughts:

      I will be watching to see whether or not gold & GDX follow through to Friday’s big “Fed hike likely off the table now” rally. Although the soft employment report was certainly bearish for the dollar, which in turn, is bullish for gold, I’m still leaning towards more downside in both gold & GDX & even think there is a decent chance that 100% & possible then some of Friday’s rally might be faded in the coming days to weeks. My conviction isn’t very strong so I will wait to see how the metal & miners follow through this week but it seems that a good deal of the move up in gold & especially GDX on Friday was due to short-covering. In fact, I’d be that the vast majority of GDX shorts were squeezed out on Friday which, if so, would clear the way for a very quick move back down.

      If they run the stops on the AG short, we can always re-short it again if it looks like the miners are poised for another correct such as the recent 16% drop in GDX. Better to stick with the trading plan on this one & cut our losses if wrong vs. digging ourselves in a hole while waiting for a backtest that could come at much higher levels or even worse, the recent correction in AG & the miners is over & they blast off on another major thrust higher.

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      • Profile gravatar of charlie
        charlie June 6, 2016 6:12 pm at 6:12 pm

        Many thanks, Randy, for your excellently logical reply !

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      • Profile gravatar of charlie
        charlie June 7, 2016 7:56 am at 7:56 am

        This morning silver certainly isn’t showing strength, as at this moment the silver futures are down 15.7 cents ( or .95% ) @ 16.29 ; and that”s even occurring while the US Dollar index is down slightly ( .07 ) @ 93.96 .

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        • Profile gravatar of charlie
          charlie June 7, 2016 11:24 am at 11:24 am

          Silver is now recovering somewhat, now down 8.7 cents @ 16.36 ,while the US dollar index is @ 93.87 . The short trade for AG certainly is not helped by a highly praising article by Adam Hamilton entitled “First Majestic Silver Soars ” that I read on Investing.com about an hour ago .

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      • Profile gravatar of charlie
        charlie June 8, 2016 9:29 am at 9:29 am

        As i’ve been discussing with Randy over in the trading room ,I sense that the Fed and ECB are trying to push down the dollar in the short term ( and therefore pad the Euro ) because they are scared that the British vote on June 23rd as to whether or not they want to remain in the farcical European Union has the strong possibility of resulting in a Brexit win . As a lower dollar ( now 93.64 ) usually means higher silver ( now 16.84 ) , it seems too dangerous to swing-trade short AG until after June 23rd to learn the outcome of the strongly effecting Euro ( and thus USD ) vote . Just my opinion , as an American living in the Netherlands .

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      • Profile gravatar of charlie
        charlie June 8, 2016 5:11 pm at 5:11 pm

        Randy – When you have the time to update your excellently marked chart of AG , probably it would show that today’s high ( 12.82 ) backkissed -or came very close to – the underside of the very steeply rising uptrend line . Plus the closing candle for AG today just printed a topping tailed doji. And,as you and Ruben pointed out separately at the end of the day, the leading markets ( especially the PM miners and IWM ) will probably roll over for a bit ; and , just perhaps, the start of something rightfully more significant will occur. Many thanks for all your excellent work !

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  7. Profile gravatar of Gaucho
    Gaucho June 5, 2016 10:15 pm at 10:15 pm

    Hi @rstoc and @charlie, thanks for your comments.
    I wil lkeep the current stop at the 11.80’s area and re-short if it goes down again.
    Regards

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