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« Silver Prices: Dare to Dream | Main | Endeavour Silver Corporation Identifies Three New Veins »

Silver Wheaton Corporation: Buy, Hold or Sell?

SLW Chart 07 Sep 2010.JPG

We have done well out of Silver Wheaton Corporation (SLW) through both our investment in the stock and also with a number of options trades. Having some cash on the sidelines looking for home raises the question of just where to place it. On one hand our favourite stock looks overbought and due for a correction, on the other it has made a new all time high and therefore has no overhead resistance and as such could move dramatically higher from this point.

Silver prices have also put in a spectacular performance and are now within striking distance of their recent all time highs, putting the '80s' to one side for now, so silver could make a dash shortly giving a boost to the whole sector. In the background we have the shadow of helicopter Ben and his plan for more quantitative easing or QE2 as its known, which will once again debase the US dollar adding to the attractiveness of gold and silver as a safe haven.

A quick look at the chart shows the Bollinger Bands widening as the stock price spiked recently with the technical indicators firmly planted in the overbought zone suggesting a breather could be on the cards. From a seasonality stand point this is the time of the year to be acquiring stock and options in order to be a position to take advantage of the coming 'fall' rally. As you know we are now overweight on this stock and it is our largest single holding and deserved so as it has outperformed the alternatives that we have looked at. No doubt you may have stocks that have also been star performers in your portfolio that we are not aware of and you are more than welcome to tell us about them.

The Labour Day holiday in the United States as rendered the markets fairly flat as all eyes are on the New York Stock Exchange as investors look for clues as to which direction this tiny sector is about take. Tonights trading session may provide such a clue, however, as we have been banging on about it, the final touches to your portfolio should have been implemented by now. If not, get to it. Some cash though is always useful as opportunities will present themselves from time to time and we need to be able to take advantage of them.

At the moment our intention is to hold onto our core position and ride out any dips that may come along. We are also looking at a number of possible options trades with regard to SLW and hope to make a decision soon. In the mean time the team involved with our premium option trading service have already started acquiring positions based on their conservative approach to building profits. Its your money so please read as widely as possible and do as much as intelligence gathering as you can before risking your hard earned cash. And do it in a relaxed, calm manner with a cool head on your shoulders, as they say!

Stay on your toes and 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.

on Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton. We cannot see such opportunities in the uranium sector just yet but no doubt they will present themselves in time. All the best, Bob.

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, with more positions opened yesterday. Drop by and take a look.

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. (Winners of the GoldDrivers Stock Picking Competition 2007)

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For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

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Reader Comments (7)

Silver stocks look likely to breakout ,buy on any pullback. Endeavor looks a better bet than Silver Wheaton at present to name but one.

September 7, 2010 | Unregistered Commentersilver bug

I am in the same quandry with MCP, Molycorp, the new star performer of the Rare Earth Minerals. This stock, a new introduction, has bolted up about 7 pts in the last week. Is it overstretched and due for a sell-off, or will it continue to forge ahead despite normal expectations. Here is a new stock to ponder - BUY, HOLD, OR SELL?


September 7, 2010 | Unregistered CommenterJohn Ell


Our concentration will be on the silver and gold sector from now until Jan 2011, so we just cant offer any assistance at the mo on the Rare Earths area, other than wish you well with it.

September 8, 2010 | Unregistered CommenterSilver Prices

For the time being, I will be holding on to my Silver_Wheaton shares.

September 15, 2010 | Unregistered CommenterZenwalker

silver bug,

If you plot both EXK and SLW on stockcharts you will see that EXK is still the same price as it was at the start of the year, however, SLW is 50% higher than it was at the start of the year.

We would be interested to know why you think that EXK will outperform SLW, so please feel free to fire in your reasoning behind the above statement.

September 18, 2010 | Unregistered CommenterSilver Prices

Yes, but that is the whole point,SLW broke out a long time ago ,if you are going to invest now EXK is in an ascending triangle nearing breakout with the potential to treble, Can SLW do that from here?

September 19, 2010 | Unregistered Commentersilver bug

silver bug,

As you know we hold stock in both these companies, so a treble would be great. Should EXK do the treble then we are confident that SLW will equal or better it, just our humble opinion though.

September 19, 2010 | Unregistered CommenterSilver Prices

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