Stock Chart PAAS

Posted by downtowntrader | 9/01/2008 08:56:00 PM | 0 comments »

Stock Chart Analysis PAAS

Pan American Silver Corp. (USA) (Public, NASDAQ:PAAS)

I've mentioned a few times how I think commodities may have topped out for this cycle and how money has been rotating out to early cycle sectors. Gold and Silver had an interesting past month in that prices fell off a cliff as the dollar surged. There is a lot of trapped money in this sector, as the move was very sharp and swift.

If you look below, I am highlighting a weekly chart of PAAS, which is a silver miner. Notice how it surged over a defined trading channel and then promptly rolled over to break below the entire channel. It got a little bounce back into the channel, and now the million dollar question is if it can hold above the channel, or if it is ready to embark in a bear market. I suspect the latter, but I think there is a good chance the dollar comes back in a little, which will allow for Silver to bounce a little higher. One of the reasons I think it may be over for PAAS though, is how it has been reacting to moving average support. Notice how it has been bouncing off the yellow moving average every time it corrects. This moving average has held as support since 2002 (not shown) and usually it bounces fairly quickly. There is still a chance it climbs back above it, but the drop was much steeper this time. My guess is that PAAS will roll over soon and offer a decent shorting opportunity. As always, please do your own due diligence.

Good Trading,


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