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Don’t Sweat the Selling Pressure: Buy Breakouts

April 22, 2024

From the Desk of Ian Culley @IanCulley

Investors are dropping Gold and Silver like they’re hot.

But don’t let the sellers push you toward the exit.

It might look ugly, but a corrective period following Gold’s vertical rally to our initial target sounds about right. Plus, three of our current long positions – Harmony $HMY, Wheaton $WPM, and Kinross $KGC – posted new 52-week highs Thursday. 

I expect the new highs list to expand as Gold and Silver work through overhead supply in the coming months.

Instead of sweating today’s selling pressure, I’m placing orders to buy the following two mining stocks on a breakout…

First up, Silvercorp Metals $SVM:

SVM is challenging last year’s high after violating a multi-year downtrend line. Trend line violations such as this indicate the beginnings of a bullish price reversal, while base breakouts signal an entry point.

A decisive close above 4.20 completes a double-bottom pattern, triggering an entry order with an initial target of 6.50 and a secondary objective of 16.50.

Next, we have a name JC highlighted last week during the monthly strategy session. Fortuna Silver Mines $FSM:

Like Gold and Silver, FSM is finding a healthy amount of selling at a logical resistance level – 4.60.

But as I outlined in prior Gold Rush videos, a former shelf of highs at 4.20 marks our risk level:

As long as FSM holds above those former highs, our trade remains intact.

On the other hand, I’m out if Fortuna slips back into its prior trading range.

Successful market speculation hinges upon understanding your timeframe, temperament, and the markets you trade. Commodity volatility can drive even the most disciplined traders to abort their trading plans.

Gold’s secular uptrend impresses. But price doesn’t move in a straight line.

As an investor and trader, you must know who you are and prepare for the pullbacks that follow explosive commodity rallies.


Click here to watch this week’s Gold Rush Video:

Remote video URL

Thanks for reading.

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And be sure to download this week’s Precious Metals Report below!

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Allstarcharts Team

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