Silver Standard Resources Incorporated (SSRI) is currently in pull back mode and in doing so is setting up nicely as a buying opportunity. As we can see from the chart this stock, like many in this sector is rather sensitive to silver prices and tends to move in a fairly robust manner with the metal.

The technical indicators were telling us that the stock was overbought and now we are seeing the unwinding of that position to lower levels. Should the pendulum swing beyond the median and into oversold territory then we could be presented with a very good buying opportunity. Another dollar or two lower and the stock price will be sitting on its 200dma and should the RSI drop to around the ‘30′ level then this would suggest to us that a buying opportunity has arrived. If and when we think that we are there we will of course let you know and we will probably buy both the stock and a maybe a few call options at that point. A lot depends on silver prices and golds movement which in turn is still inversely correlated with the dollar. Make no mistake about it this is still a dollar ‘play’ until the day comes when precious metals disconnect from the dollar and go their own regardless.

We hope that this sort of heads up helps you to understand what we are thinking and how we intend to trade the situation once the opportunity has been identified.

We will observe for now and let know when we think the time is ripe to move on this one.

Have a good one.

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