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Silver Wheaton Corporation Pulls Back

SLW Chart 21 May 2010

We will start with a quick look at the chart for Silver Wheaton Corporation (SLW) where we can see that the technical indicators are heading into the oversold zone which could present us with another opportunity to trade a few Call Options shortly.

On the above chart we draw your attention the gaps left as SLW heads south on the back of lower silver prices. We expect these gaps to be filled when the stock bounces on the resumption of silver prices heading north.

The last few days has seen the volume spike at 15 million shares traded per day as investors move to lock in profits that have been generated by Silver Wheaton’s excellent recent progress.

We see this sell off as a buying opportunity in the making as the technical indicators head south into the oversold zone, as always the big question is just when do we think the selling has come to a halt and is it safe to bag a few shares. A lot of work needs to be done as the world of currencies is in complete disarray and the oscillations appear to gyrate with ever increasing volatility.

Also note that the European politicians are struggling to act in unison as evidenced by the German chancellor announcing, without discussion with her European partners, the banning of naked short selling. Its not so much the action that bothers us but the manner by which it was dispensed. It reminds us of the time when the Irish banks decided to guarantee their banks, resulting in the other European nations having to step up and do the same.

There are a lot of nervous fingers on the trigger out there so expect the volatility to continue, however, this precious metals bull market remains intact, despite the pressure on the panic button.

Silver Wheaton Corporation trades on the New York Stock Exchange and the Toronto Stock Exchange under the symbol of SLW and is currently trading at $17.71.

The Company has a market capitalization of $6.07 billion, with 342.54 million shares outstanding, a 52 week trading range of $7.12 to $21.58 with an average volume of 5-6 million shares traded, although spikes in trading have seen 14 million shares change hands.

Have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.

Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more. have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

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Disclosure: SLW