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HL Price Targets + Additional Notes on the Mining Sector

The price targets for the HL (Hecla Mining Co) short trade (the entry posted earlier while trading at the current price of 6.76) are 6.32, 5.69 & the final target at 4.87. The suggest stop is any move above 7.30 or lower using a 3:1 R/R if only targeting T1 or T2.

HL daily Aug 19th

HL daily Aug 19th

Keep in mind that I will most likely be adding several more individual gold & silver mining stocks as trade ideas along with GDX/NUGT and SIL (silver miners ETF). However, these stocks are extremely volatile & with SLV sitting right above a large gap (support) & the market poised for a pullback, gold & silver (along with the mining stocks) could experience one last thrust higher before succumbing to the bearish technical covered in yesterday's video.

I have started adding some of the individual miners that appear to be breaking down today as official, active short trades today & will likely add more going forward. Due to the volatile nature & large price swings in these stocks, my own plan & suggestion for those also looking to position for a pullback in the mining sector would be to gradually scale into these positions (shorting a fractional position(s) to either individual miners and/or an ETF like GDX, NUGT, DUST, SIL, GDXJ, JNUG, JDST, etc...), and continuing to add at objective entries over the next week or so whether the sector moves higher OR lower, with stops calculated based on your average cost using a risk-to-reward ratio of 3:1 or better to your preferred price target(s).

For those looking to add exposure to the mining sector, make sure to factor in the above average gain AND loss potential on these stocks. One should also determine their target exposure to the sector (e.g.- 15% of their portfolio) in order to determine the position size on each trade, if scaling in, to allow room for additional trade ideas (unless trading one ETF vs. multiple individual stocks and/or ETFs).

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Aug 19, 2016 1:22pm|Categories: Completed Trades - Short, Gold & Commodities|Tags: |7 Comments

7 Comments

  1. pangblood August 19, 2016 2:00 pm at 2:00 pm

    Been keeping up with your updates on the mining sector. Took a teeny weeny position in DUST, not gonna make the same mistake of going too ham on these leveraged ETFs. Thanks Randy

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    • rsotc August 19, 2016 4:53 pm at 4:53 pm

      G-luck on this one PB. As the potential exists for a substantial correction in the miners (whether that happens or not), one suggestion might be to only add to that position as GDX, GLD, SLV, etc.. move lower, ideally breaking key supports & trendlines, thereby firming up the bearish outlook. Of course you will be buying DUST at higher prices but with DUST closing at 5.43 today with some likely (and approximate) targets at 7.40, 9.35 & 11.65, there would still be a lot of upside potential if any or all of those levels are reached. Another thought would be to periodically raise your stops to assure either a breakeven or a profit, based on your average cost basis.

      As always, let me know if you want an update along the way although unless this current bearish setup dissipates in the coming weeks, I will be posting regular updates on the mining sector going forward for the time being. Have a great weekend.

      -RP

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  2. Eric K August 19, 2016 2:02 pm at 2:02 pm

    @rsotc Randy I assume you are planning on taking these shorts home over the weekend. Will you let us know if you are doing the same with NUGT or holding off until Monday?

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    • rsotc August 19, 2016 4:27 pm at 4:27 pm

      Eric- Yes, all the silver & gold shorts posted today are intended as swing trades. Although I don’t take every trade posted on the site, just as I take some not posted on the site, I do have positions in the HL, SBGL & UEIC active trades posted today (which I took home for the weekend). I also have a relatively small short position in NUGT that I’ve been scaling into although I haven’t added it as an Active Trade or even an official trade setup yet.
      Official trade ideas are always followed up with while unofficial trades may or may not be. However, I’m always glad to share my thoughts on any trade ideas, official or unofficial, mine or any stock or ETF that a members of the site wants a second opinion on. Although NUGT isn’t an official trade idea yet, I’ll post some potential targets (using the GDX chart) soon.

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  3. snp August 19, 2016 11:22 pm at 11:22 pm

    7.30 is a perfect 618 of the 13 ath as well. great level.

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  4. j1persi August 22, 2016 9:29 am at 9:29 am

    Randy do you think it’s safe to add to HL Short position after this decent drop or should I wait for some kind of back test ?

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    • rsotc August 23, 2016 12:41 pm at 12:41 pm

      @j1persi – As you say ‘add to an HL short position’, I assume that you already have a position, in which case should be profitable. If so, I think it would be best to add in one of two instances: Either a bounce back up to around the 6.60 area (slightly below yesterday’s & today’s highs) –OR– on a break below 6.30, which is the actual support level that horizontal line on my daily chart is positioned at. Keep in mind that I set the price targets for short trades slightly above support to help avoid missing a fill, should the buyers step in (or short-sellers cover) just before the actual support level is it.

      As such, I set the first price target on HL at 6.32, a bit tighter to the actually support level than usual & so far, HL hit a low of 6.34 yesterday & 6.32 (first target now hit) just a few minutes ago. With a decent chance of a reaction (bounce) off this initial tag of the first price target, it would be prudent to either wait for a bounce to add to the HL short OR a solid break (by more than a penny or two) below the 6.30 support level.

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