I was away from my desk for most of the day yesterday & have numerous trade ideas to highlight, email notifications of new posts will only be sent out on the most time sensitive updates today. The mining sector remains among my top picks on the long side right now with some of the recent trades, such as ANV, already approaching their first profit target. When adding to those trades, it is best to wait for either a decent pullback to support following the first tag of the profit target (which is typically placed just shy of the actual resistance level) –OR- wait for a solid break above the resistance level associated with T1, assuming that both the daily and intraday charts remain bullish and are not overly extended or flashing any warning signs such as divergences or bearish candlestick formations.
AEM daily Jan 16th
There are also numerous miners that still offer objective entries or add-ons for those scaling into these trade ideas. AEM (Agnico Eagle Mines), for example, has recent taken out the R2 downtrend line which was previously stated on the live chart as the next buy signal for the stock. Although there are some minor resistance levels along the way in which pullbacks are likely, the next major resistance level and first target (T1 at 33.48) is still about 18% away. For those new to the site, a special category of live charts listing my top picks in the mining sector was posted on the Live Chart Links page just before the new year kicked off. Although I can’t post all significant technical events, such as breakouts above resistance or pullback to support, I do my best to keep the live charts up-to-date by adding new notes, trendlines, support & resistance levels as new developments occur. The live chart of AEM can also be viewed by clicking here.
Also keep in mind that most of the gold & silver mining trade ideas are categorized as both regular Long Trade ideas (typical swing trades) as well as Long-Term Trade ideas (trend trades or investments), as a case have been made over the last few months that gold may have possibly put in (or is currently in the process of putting in) a lasting bottom and end to the cyclical bear market that started back in Sept 2011. This means that, depending on how the charts develop over the coming weeks to months, additional price targets may be added on some of these trades. Even if this only proves to be another bear market rally in gold, silver & the mining stocks, chances are good that we can still make some very profitable trades as we did when we nailed the bottom in the gold mining sector to the very day last summer (June 26th), in which GDX rallied about 40% and many of the individual gold & silver mining stock trade ideas posted on June 26th hit profit targets for much larger gains. Finally, as promising as the sector looks at this time, never fall in love with a trade, always stay diversified (don’t put too much of your trading or investing capital into one stock or sector) and adjust your position sizes on the miners commensurate with your risk tolerance as well as the above average volatility of these stocks. Reducing your position size below average on these trades will allow for the larger stop allowances which is needed when trading such volatile instruments. The above average gain potential on these trades still allows for very attractive risk/reward profiles, even if allowing for double-digit stop losses. As always, if you have any questions regarding these or any other trade ideas posted on the site, feel free to contact me.