Silver/Hecla: Watch for now!
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| Topic: Silver Mining Companies — December 20th, 2007
We sold 50% of our holdings in Hecla and signalled to our readers and subscribers of The Silver Prices Newsletter on 30th November 2007 when HL was trading at $11.89.
Silver prices and silver stocks have taken a battering since then, especially Hecla, which has lost over 25% since we signalled to take money off the table.
The last trading session was the first positive session for the stock in some time, and perhaps Hecla is finding some support on its 200 day moving average line. In terms of technical indicators, the RSI is the lowest its been since August 16th, at the height of this summers credit crunch, so this particular indicator is suggesting that now is a good time to purchase Hecla Mining. However the MACD has yet to give us the BUY crossover signal, but the STO is in the BUY zone at the moment. Most importantly, Hecla has dropped to become more in line with other silver stocks and now sits on its 200 day moving average. This is a healthy position for the stock to be in and it is now at a “safer” price level to buy.
Part of the reason why Hecla has been sold off is due to weaker silver prices in the last few weeks. Silver was due a correction and consolidation after its great rally since the summer. We predicted that there would be a major rally in precious metals beginning at the end of the summer which has happened, but now silver is taking a breather before getting ready to move higher again.
The question is, where will silver bottom and when will the next rally begin?
Well we have yet to see the technical indicators give a strong bullish signal on silver and the price is still a good 50 cents above its 200 dma. We think there is a possibility that silver prices could move further south from here so for the moment we will wait and watch the silver price for an opportunity to trade. As for Hecla Mining, we have decided to watch it for a little longer to ensure that is has actually bottomed.
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Lastly we would like to wish a Merry Christmas and a prosperous New Year to all our readers from all the team at Silver-Prices.net!
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I think a lot of the correction in Silver (and Uranium) is due to the pressure the various global stock markets are feeling in this current credit crunch. If the central bankers are correct, then their massive injections of capital into the financial systems will keep the markets lubricated enough to keep our various economies out of recession. That being said, if there is not going to be a Santa Claus rally this year due to so many stock holders selling off to get a loss for their income tax return, then I predict that once we hit the New Year there will be a nice rally in silver and uranium. I mean, platinum is over $1500 an ounce.
Comment by daveydog — December 21, 2007 @ 1:45 am