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« Silver Standard Resources Inc: Uninspiring Stock Price | Main | Silver and Gold Update 17 May 2010 »

Silver Wheaton Corporation Pulls Back

SLW Chart 21 May 2010

We will start with a quick look at the chart for Silver Wheaton Corporation (SLW) where we can see that the technical indicators are heading into the oversold zone which could present us with another opportunity to trade a few Call Options shortly.

On the above chart we draw your attention the gaps left as SLW heads south on the back of lower silver prices. We expect these gaps to be filled when the stock bounces on the resumption of silver prices heading north.

The last few days has seen the volume spike at 15 million shares traded per day as investors move to lock in profits that have been generated by Silver Wheaton's excellent recent progress.

We see this sell off as a buying opportunity in the making as the technical indicators head south into the oversold zone, as always the big question is just when do we think the selling has come to a halt and is it safe to bag a few shares. A lot of work needs to be done as the world of currencies is in complete disarray and the oscillations appear to gyrate with ever increasing volatility.

Also note that the European politicians are struggling to act in unison as evidenced by the German chancellor announcing, without discussion with her European partners, the banning of naked short selling. Its not so much the action that bothers us but the manner by which it was dispensed. It reminds us of the time when the Irish banks decided to guarantee their banks, resulting in the other European nations having to step up and do the same.

There are a lot of nervous fingers on the trigger out there so expect the volatility to continue, however, this precious metals bull market remains intact, despite the pressure on the panic button.

Silver Wheaton Corporation trades on the New York Stock Exchange and the Toronto Stock Exchange under the symbol of SLW and is currently trading at $17.71.

The Company has a market capitalization of $6.07 billion, with 342.54 million shares outstanding, a 52 week trading range of $7.12 to $21.58 with an average volume of 5-6 million shares traded, although spikes in trading have seen 14 million shares change hands.

Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.

Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more. have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

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Reader Comments (10)

I'll be watching SLW as well. The 200 SMA is in the 15's. I expect to see support by then.

May 21, 2010 | Unregistered CommenterDavid

Good call (pun intended) as to the change in direction for SLW. Will be watching and waiting for the next move. Thnx.

May 21, 2010 | Unregistered CommenterJohn Ell

In that chart that says if you invest $1000 and it became $6000, does that mean only a total of $1000 or $1000 for each signal. I'm sorry, it's confusing. Of course an investment of $1000 to make $6000 would be incredible and if that were so how long did it take to do that. After many months of following your email newsletters I am hoping to try your service for 6 months soon.
Much appreciation for clarification.

May 21, 2010 | Unregistered CommenterBrian Kaschenoff

The $6825 figure quoted on is the total accumulated profits from the trades, if the investor were to have invested $1000 in each trade, ie $1000 is invested in each separate signal.
Hope this clears things up!

May 22, 2010 | Unregistered CommenterSilver Prices

You've probably bought call options on SLW by now.

May 26, 2010 | Unregistered CommenterDavid


We did try to buy a few today, but our bid was too low although they nearly came through towards the end of the trading session. So we will take another look tomorrow. I think that we would have been happy to go a little higher and acquire them, but we do try and get a bargain..... and sometimes we miss out altogether.

May 26, 2010 | Unregistered CommenterSilver Prices

I think I bought a little too high. Oops! Well good luck.

May 26, 2010 | Unregistered CommenterDavid

I still do not understand that $1000 to $6825 situation. How do you know how many trades you made or signals if that's the same thing and how do you know how much it cost to invest in each signal. I am totally ignorant of how this works. Does someone mind explaining in more detail, assuming that I really know nothing of how this works. Sorry and thanks.

May 26, 2010 | Unregistered CommenterBrian Kaschenoff


Dont worry about it, we may well have to pay even more tomorrow!

May 26, 2010 | Unregistered CommenterSilver Prices

As for the $1000 to $6825 situation.
It was based on the last 16 trades are shown on the x axis of the chart. If one simulated and invested $1000 in each signal/trade then after those 16 trades the accumulated gross profits would have been $6825. Obviously this is just a theoretical exercise, as it may not be always possible to invest exactly $1000 in each trade as you cannot trade fractions of an options contract.
Hope this helps!

May 27, 2010 | Unregistered CommenterSilver Prices

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