Hecla Mining Company Meets Resistance
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| Topic: Silver Mining Companies — March 14th, 2008
As regular readers of this web site know our strategy has been to retain a core position in the silver mining camp and also to trade from time to time when the opportunity presents itself. Hecla Mining has provided us with such opportunities in the past which we have taken advantage of, in order to generate profits.
Previous chart dated 29 February 2008:
The chart above records our actions in terms of when we bought and sold, now lets take a look at today’s chart of Hecla Mining to try and ascertain where we are now and what we should do next.
Hecla Mining Chart dated 13 March 2008:
We can see that Hecla has put in a terrific run from $8.5 to the $12.00 level in just a couple of months, a move of almost 50% for the stock price. Hecla may now need a well earned breather and experience some profit taking. The chart appears to be showing us some resistance at around the $12.00 level with Hecla unable to form a new high. We can also detect a wave motion with the price as it has moved from lows of around $8.00 to $12.00 and back to $8.00 and again back to $12.00. So we are back at a peak which begs the question of what to do now. The temptation for us is to take some more profits and wait for this stock to return to much lower levels before buying again. However, Hecla may never return to the $8.00 level again but could go somewhere near. Silver is currently $20.00 plus so the upward pressure is on. For now we will wait until after the 18th March and the news of the latest rate cut is out sending the dollar down and precious metals higher, then we will reassess the situation, but for you it is this weekends homework. So answers please in our comments box below this article.
If you are not into the silver market yet please feel free to enrol for our free sparkling silver-prices newsletter for more adventures in the world of precious metals investments
Have a great weekend.
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Why do you think EXK, CDE and othe silver miners are not making a move to the upside following an almost $7 increase in the silver? It seems if silver pulls back a few dollars these stocks will get crushed. Seems like all downside risk I am very disappointed with the action of the stocks. What am I missing? Help!
Thanks,
Tim
Comment by Tim Puchley — March 14, 2008 @ 5:21 pm
RBC just raised Hecla’s target price from $14 to $16/share so I, for one, am staying in Hecla for a bit longer to see where this stock goes. When silver bullion starts approaching the $23-$25 range I will consider selling Hecla. As you mention in one of your other emails, I too believe there is more “juice” left in the silver market and this can only help put upward pressure on Hecla. Having said all of that, it will now probably tank on Monday!
Comment by Norman — March 14, 2008 @ 10:57 pm
The stock made a new high today and is producing. H and shoulders bottom counts to $13. Macd was revived today. New target is interesting at $16.
Comment by Ralph O'Brien — March 15, 2008 @ 12:52 am
One opinion…If you own Hecla hang on.
Why? In the very near term due to the expected rate cuts as mentioned in this article. The Fed must ensure liquidity is available to assist struggling homeowners in the U.S…also, with Bear Stearns experiencing “severe paralysis” the financial industry is just starting to show cracks that will continue for the next six months to a year (at least). This spells…PRECIOUS METALS…gaining for the foreseeable future.
Cheers.
Comment by Mark — March 15, 2008 @ 1:04 am
I agree with Mark, but it all depends on your investment criteria, Long term or Trader. In over forty years in the markets my belief is that if you do your homework on Management, Commodity, Country risk and basic value the long term investor almost always wins. Hecla has all the right boxes ticked with strong growth in earnings and prospects , they are picking up all the low hanging fruit at present and having a wonderful meal. Have a look at ILDS if you want a little comfort as they are being taken over at 1.2 Hecla for each share, I am a holder.
Comment by John P — March 16, 2008 @ 8:40 pm