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Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Silver Wheaton, A Super Buy at $22.50

Commodities / Gold & Silver Stocks Jun 17, 2011 - 09:35 AM GMT

By: Dudley_Baker

Commodities

Best Financial Markets Analysis ArticleDon’t buy Silver Wheaton yet as it will probably drift down to serious support around the $22.50 range over the summer months.

Silver Wheaton, the go-to silver company for many investors, has taken a pounding of late.
The shares trade on both the NYSE and the Toronto Exchange under the symbol SLW. To quote from the company’s website,


Established in 2004, Silver Wheaton has quickly positioned itself as the largest metals streaming company in the world. The company currently has fourteen silver purchase agreements and two precious metals agreements where, in exchange for an upfront payment, it has the right to purchase all or a portion of the silver production, at a low fixed cost, from high-quality mines located in politically stable regions…”

In most cases Silver Wheaton has right to buy the production at $4 an ounce and of course there is no exploration risk or there part, thus a win-win situation. 

The shares hit a high of $46.90 on April 8 but currently trading around $30, thus a 33% haircut, so far. So, is the bottom in place? We think not.

However, the slow summer season is just starting for the resource shares and therefore, we see the potential for further declines in the share price.

Looking at the chart below you will see strong support around $28.50 - $29. A break of this near support will portend lower prices and the next support which we see is at $22.50.

 Influencing our decision on SLW is our view that silver has not made its low since peaking close to $50 in late April. We see silver possibly moving back to the low to mid $20 range before the final bottom is in place.

After this necessary and healthy cleansing silver and Silver Wheaton will once again become market darlings.

Some patience now will be greatly rewarded in the coming months.

Silver Wheaton is just one of the many resource companies we have on our watch list and we will be monitoring the prices of over 50 companies searching out the best opportunities and entry timing for our subscribers.

For those readers unfamiliar with our services we provide:

1. An online database for all warrants trading on the natural resource companies in the
    United States and Canada. Our database is the most comprehensive database that
    you will find.
2. In addition for our Gold Subscribers we provide:
    A. "A Look Over My Shoulder" - This is my entire personal portfolio and I provide an
         audio update each Thursday evening and emails as I buy or sell securities or
         warrants. Each subscriber can decide whether to follow me but this is your
         decision and we suggest that subscribers do their own due diligence before
         buying any securities.
   B. Insiders Trading Data:
       We track the insider trading on the Canadian Securities and issue BUY and SELL
       Alerts as we deem necessary. We have a great track record of approximately
       100% gains on all closed trades.

We encourage all readers to sign up for our free weekly email.

Dudley Pierce Baker
Guadalajara/Ajijic, Mexico
Email: support@preciousmetalswarrants.com
Website: PreciousMetalsWarrants
Website: InsidersInsights

Dudley Pierce Baker is the owner and editor of Precious Metals Warrants and Insiders Insights. Articles are written by Dudley Baker along with contributing editors, Arnold Bock of Mendoza, Argentina and Lorimer Wilson of Toronto, Canada. PreciousMetalsWarrants provides an online subscription database for all warrants trading on junior mining and natural resource companies in the United States and Canada and a free weekly newsletter. InsidersInsights alerts subscribers when corporate insiders of a limited number of junior mining and natural resource companies are buying and selling.

Disclaimer/Disclosure Statement:PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. The opinions expressed herein are the express personal opinions of Dudley Baker. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.

Dudley Pierce Baker Archive

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