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« Silver Standard Resources Incorporated in the Buy Zone | Main | Silver Wheaton Corporation Up 26% in a Week »
Thursday
Jan142010

Silver-Prices.Net Portfolio Update 14 January 2010

Silver Chart 14 Jan 2010.JPG


Chart courtesy of Stockcharts



Since the last update in September 2009 silver prices have performed in a yo-yo fashion and are only slightly higher now than they were then. However, as we can see from the above chart the moving averages have moved consistently higher adding support to the silver price which bodes well for the future. Note that silver prices popped up recently as the MACD formed a golden crossover, which is usually a positive indicator. Also note that silver prices have held up well despite the correction, which we believe was a good thing for silver as we look forward to silver making a steady upward climb.

Over the last few months a number of bears have been calling for precious metals to fall, the bull market is over, the dollar is going to the moon, etc. We have not changed our position and remain very firm supporters of both gold and silver and their associated stocks. We don't have a penny in the mainstream or broader markets and have no intention of investing there in the foreseeable future.

Despite the precious metals knockers we have managed to gain another 485 new subscribers so we extend a very warm welcome to you all. Now don't just read us, warm up your typing fingers and get involved by commenting on our articles whether you agree with us or not. The more opinions we have the better.

In our opinion both silver and gold are still a dollar play and therefore we must keep an eye on the dollars behaviour. It has had a rally recently which now looks like it has run out of steam and could fall quickly. Should this happen then new highs for both silver and gold will be more than just a possibility.

Here is a summary of the silver stocks we are currently invested in or following:

Hecla Mining Company (HL) – Initially we bought this stock for $5.27 - a quality silver stock which was going along nicely and then we thought Hecla was overbought, as it hadn’t corrected with other silver stocks, we took profits on Hecla at $11.89, the stock price then dropped so we bought it back at $9.72, getting a 18% discount on our shares. On the 14th April we sold 50% of this stock for $11.79 in order to lock in some profits as we anticipated a fall. On the 18th June 2008 we re-purchased Hecla’s shares for $9.61. Hecla has traded as low as $0.99 and closed yesterday at $6.29. Hopefully Hecla can continue to improve and eventually surpass its previous highs.

Pan American Silver Corporation
(PAAS) – Initially we bought this stock for $18.00 and on the 23rd August we gave another BUY signal on PAAS when we said “We made a further purchase today at $24.10” giving us an average purchase price of $21.50. On January 31st, 2008 we sold about 50% of our shares for an average price of $36.65, locking in a profit of around 70.32%. On the 18th June 2008 we re-purchased PAAS shares for $31.06 and on 16 July 2008 we made another purchase at $36.53. PAAS has traded as low as $8.93 over the last year and was standing at $18.55 at our last update so some improvement has taken place as PAAS closed at $25.70 yesterday.

Silver Wheaton Corporation (SLW) – Originally bought for $9.41 and made another purchase on 15 July 2008 at $15.61 and a further purchase on 6 August 2008 at $11.43. SLW was trading at $8.52 back in September but thankfully closed at $17.40 yesterday.

Silver Standard Resources Incorporated
(SSRI) Initially we bought this stock for $19.98 and on the 20th August we gave another BUY signal when we wrote “we think Silver Standard is at a good level to buy at the moment and we bought today at $28.99” giving us an average purchase price of $24.48. On January 31st, 2008 we reduced our exposure by selling around 50% of SSRI for an average price of $34.82 locking in a profit of 42.22%. SSRI dropped to $7.99 during in the sell off but recovered well to trade at $19.16 last month and yesterday it closed at $23.72, a step in the right direction.

Eagle Plains Resources Limited (EPL) – We bought this stock for around $0.53, it has been down to $0.08 but closed at $0.24, at the last update, yesterday EPL closed at $0.19. Not good enough, we will now look for a suitable exit point.

Endeavour Silver Corporation (EXK) – We initially bought Endeavour for $3.97 and on 7th December 2007 we bought more shares saying; “EXK is down from over $5.50 and as it has been beaten down so much we are signaling a BUY again on this stock and we made a further purchase bringing our average price to $4.10 per share as we doubled our position.” we secured EXK for $3.26 on the 2nd April 2008. Great results and the ability to do what they say they are going to do have propelled this stock northwards from $1.75 in September to close at $4.28 yesterday.

Minco Silver Corp (MSV) - Bought for $2.80 as a speculative move, it later dropped to trade at $0.40, which hit us hard, however it has been showing signs of recovery during and during the last update it traded at $2.00 closing yesterday at the same price of $2.00. However, it has made no progress and may go if performance does not improve.

The world remains full of financial turmoil, the outcome of which we expect to be the continuing demise of the dollar and an ever-increasing recognition of both silver and gold as the only place to be. Apart from precious metals we do not hold any other stocks as we are believe that this sector is about to boom.

Have a sparkling week.

Any thoughts – then fire them in.

All the best.

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Reader Comments (16)

this is not a golden crossover, golden crossover is when 50 EMA crosses 200 EMA on price. and you miss that stochastic just did a cross at the top, this idicator is more important than MACD and btw, if you see the weekly it has a toppy MACD line, all this bull market on PMs is about to end badly

January 14, 2010 | Unregistered CommenterDi

As a relatively new investor to silver it would be helpful if you could provide either technical or fundamental information as to why you think silver and/or gold stocks would move higher or lower. For instance, what are the proven reserves of HECLA vs. XYZ (best of breed) or new reserves found adding $$$ value to the stock or support and resistance explained (in a little more detail). I enjoy the information but it could be so much better backed by information that makes sense. There are too many people "promoting" instead of analyzing. Thanks so much for your consideration.

January 14, 2010 | Unregistered CommenterLarry Haines

Appreciate the summary how about a portfolio summary? What is the total gain or loss??

January 14, 2010 | Unregistered CommenterRand

I agree that silver and gold are still largely a dollar play for now. However I disagree with your position that the dollar rally has run out of steam and therefore we can expect the PM's to soar from here.

This dollar upswing is a correction of a much larger dollar decline (from Mar. to Dec. '09)that saw the dollar fall from 90 to 74. That was a huge move taking nearly a year to form. So in my opinion, a few short weeks of rising prices isn't likely to constitute a full correction of that move. With admitted volatility, the dollar moves higher and the PM's lower in the short term.

January 14, 2010 | Unregistered CommenterSteve

Yes, badly for all you PM bears who are gunna have to eat your shorts...

January 14, 2010 | Unregistered Commentersnakeman

Di,

We agree with you, not that gold is going to $500/oz but that the golden crossover is the term applied to an event between two moving averages.

There are many crossovers and this is one definition we dug up regarding the MACD:

'MACD is developed by Mr. Gerald Appel, which is combined the Oscillator analysis and the trend analysis. MACD is using the two index smoothing MAs, one is the leading curve and the other is delayed curve.

The cross point of those curves is regarded as the most significant signal to buy or sell in the MACD analysis.'
We draw your attention to it being 'the most significant signal to buy' which we tried to make clear on our charts by putting a box around it and stating that we are talking about the MACD. Your point is taken though and maybe we should give it another name like Super Crossover or something.

We disagree with you that the STO is more important, however if you are having a lot of success with it then don't be put off by us.

Finally, the PMs have been increasing in price for around 9 years and this bull market is still intact so most metals bulls are doing well. However, if you have a trading vehicle that is doing better then please let us what it is.

We have asked you in the past if you are shorting gold and silver but you have yet to answer that question.

Your comments, as always are appreciated.

January 14, 2010 | Unregistered CommenterSilver Prices

Larry,

You can use the search box at the bottom of the page to find all of the articles we have posted on a particular stock. We tend to do a lot of research and publish it before we buy the stock, after that we follow up with various updates on that stock. We certainly do not have a knowledge of every stock out there and restrict ourselves to the few that we have, although this will change as we drop one stock in favour of another.

The important thing is to hold some PMs, the vehicle you chose is largely dependent on your circumstances and objectives.

Please keep in touch and let us know how you get on.

January 14, 2010 | Unregistered CommenterSilver Prices

Rand,

We deploy not only our own cash but that of a few friends and colleagues who are not too keen on the 'web site' although there are a few ideas under discussion. We, for instance do not publish what weighting we have in each stock except to say which is our biggest holding etc. Ideally I would like to publish the statement from the brokers then we would have total transparency which we may do in the future. The best we can do at the moment is publish every trade, the good, the bad and the ugly.

January 14, 2010 | Unregistered CommenterSilver Prices

snakeman,

Would you like us to feature what you do for a living? Guard snakes is something we would never have thought of but you never know there might be a number of like minded people who would be interested.

January 14, 2010 | Unregistered CommenterSilver Prices

Thank you sir. I will dig in with Gusto. Right now I hold $18 calls on silver, bought and sold SLW making about $4/share and thought it might pull back, but???. I'm watching what pressure the dollar, earnings for the S&P, and general sentiment do to the equity markets and don't want to get caught in a downdraft...

January 14, 2010 | Unregistered CommenterLarry Haines

Thanks for asking...
Guard snakes too funny...
Actually I breed high-end snakes for the alternative pet trade, primarily small python species...like many people, I took a hobby to the next level and now earn well into 5 figures on a part-time basis, but still work part-time in a medical specialty...but it's more than just money motivation, I publish some of my work and have presented papers at herpetological symposia, mostly work involving captive propagation of an endangered species (endangered because of the hide/skin trade and habitat destruction)...I'm very fortunate to have found early in life work that fuels my passion...
Snakes have financed every ounce of silver and gold in my holdings...your column has helped me learn about PM stock trading, as of now I'm willing to "settle" for the physical stuff...it amazes me that PM bears think US and world finances are stabilizing to the point where the PM bull market is near its peak, I do not subscribe to that belief (as you may have guessed lol)...
Again thanks for your contribution to the PM community...
sjm

January 14, 2010 | Unregistered Commentersnakeman

snakeman,

You are one the fortunate few, live your dream to the full.

January 14, 2010 | Unregistered CommenterSilver Prices

I'm thinking about buying some silver stocks. Considerations are SLW, EXK, ECU, CDE, etc... Which two will give me the most bang for my buck?

January 14, 2010 | Unregistered CommenterANTHONY SIMPKINS

Anthony,

All we can say is that of the four you mention we own two of them.

To see what we have written about them in the past just enter the symbol in the search box below.

January 14, 2010 | Unregistered CommenterSilver Prices

Silver-Prices, I read every one of your emails (gold-prices, too) and appreciate your informative service. I also like your tactful replies to comments!

January 15, 2010 | Unregistered CommenterDiana

Diana,

Thank you for your prompt response. I think I will go with SLW and EXK.

January 15, 2010 | Unregistered CommenterANTHONY

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