From time to time during the bull rally in precious metals we will chart the reactionary pullbacks and/or corrections for logical points to initiate, add to or buy back positions. Today we take a look at a few smaller companies that I think are quality situations.
We should keep in mind that yesterday does not need to be it, the pullback. Last Wednesday (is Wednesday the new Tuesday, which used to be precious metals smack down day?) the sector got hit in a one [day] whacking. One of these times an actual correction will come about.
This week could be one of those or yesterday could have served to refresh upside momentum. We just cannot know. So I think that managing individual charts (as long as we feel that a bull rally or bull market are still in play) is the way to go.
AAU (Almaden Minerals) has a logical buy area at the SMA 200 or above. A gap fills at 1.50 and there resides a trend line. I do not expect the support at 1.30 to be tested, but in the exploration stocks you never know what kind of one day liquidation can happen.
PG.TO (Premier Gold) is a quality exploration company with properties in Ontario and Nevada. 2.10 to 2.15 looks like the pullback buy zone if it gets that low. 2 very doable if any sort of meaningful sector disturbance materializes.
MDW (Midway Gold) is at support now but the trend line is lower at 1.12 or so and there is more support (and moving averages) at around 1.03. I would not put it past this one to test the trend line at least because it got out of whack after getting pumped a few weeks ago. These distortions can remain in a stock’s price for a while.
EMXX (Eurasian Minerals) did not get bent out of shape to the upside like some items, so I expect its reaction to be more orderly. Support seems pretty clear at 1.00 to 1.05.
RIOM (Rio Alto) looks to be just about to a buy point after a nice reaction yesterday.
SAND (Sandstorm Gold), a more speculative royalty company, banged a support zone yesterday and I took the opportunity to buy it back. As noted, the chart pattern measures to 6.65. Downside potential appears to be to around 5 bucks.