Silver Wheaton Corporation: Coiled Ready to Spring

We will kick off with the chart for Silver Wheaton Corporation (SLW) which shows that SLW appears to have met with some resistance at $27.00, which it has attempted to vault half a dozen times and failed to do so. Some of our readers have interpreted this as being as far as SLW can go and they might be correct for now.

We see it as a pattern of consolidation which has been forming over recent weeks providing a new base or a foundation for the stock. Taking a quick look at the technical indicators we can see that they have experienced some relief from the relentless, onwards and upwards pressure that has been on the stock. In particular the RSI has dropped to 63.78 having been to the high 70s when silver prices started to accelerate.

It will now be interesting to see what emanates from the next meeting of the Fed which is scheduled for 2nd November 2010. More money being printed and pumped into the financial system will give silver and gold prices a boost, however, a more conservative approach to money printing may well have an adverse affect on the precious metals sector.

For now we are maintaining our overweight position in SLW as we see no reason to alter it. We did examine our holdings of Call Options in SLW and as yet have not made any changes, however, time waits for no-one so the time premium will decay thus reducing the value of these contracts. Consolidation is fine for the stock but it is the enemy of any options trade so we do need to pay a lot of attention at this juncture. The options are currently showing a profit ranging from 19% to 54%, hopefully they can still improve and give our account a little boost. Once through the $27.00 level SLW could go on another little run, especially if silver prices continue to improve and the shorters have to cover.


Silver Wheaton Corporation trades on the New York Stock Exchange and the Toronto Stock Exchange under the symbol of SLW.

The Company has a market capitalization of $9.20 billion, with 344.00 million shares outstanding, a 52 week trading range of $11.86 to $27.31 with an average volume of 6-7 million shares traded, although spikes in trading have seen 14 million shares change hands.


Back to our latest venture which was the launch of an Options trading service we are pleased to report that it is going very well so its a big thanks to all those who have signed up for it and the supportive emails that you have sent us.




The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.


Stay on your toes and have a good one.

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