Precious Metal Stock Valuations – Limiting downside risk while still having major upside potential
Erik Wetterling joins me to discuss what he looks for in metals stocks when looking at current valuations. In the last few months pretty much every precious metals stock has moved higher. Now is a good time to find those stocks that have solid assets that will limit the downside risk.
Click here to visit Erik’s website – The Hedgeless Horseman.
I’m not looking for a big correction but perhaps some downward drift for a few days. If HUI get to around the 285 level, I plan on adding to a couple positions. I’m wondering though how far we’d go down if the general markets cave for a 20% or so fall. Thanks for the post and chart.
Here’s a “competing” index (and basis for GDX). That blue speed line appears to be holding but there is more nearby support to watch if it doesn’t:
https://stockcharts.com/h-sc/ui?s=%24GDM&p=D&yr=1&mn=11&dy=0&id=p49773392289&a=673663556
This fork (red) might add some significance to today’s low so far:
https://stockcharts.com/h-sc/ui?s=%24GDM&p=D&yr=1&mn=5&dy=0&id=p02077422571&a=672055134
A cup and handle forming perhaps?
This one definitely adds significance to the low this week (Tuesday):
https://stockcharts.com/h-sc/ui?s=%24GDM&p=W&yr=6&mn=11&dy=0&id=p03237472548&a=731189324
Thanks for the additional comments and charts Matthew. You are a gentleman!
This might have been my most chaotic rants to date…
Did I get across any points I wonder hmm š
I for one appreciate your blunt honesty.
Good! š The more I learn and see the more I wonder what I am doing in this space hehe. Well, there are a few gems and catching a perhaps once in a lifetime gold bull could be everything one needs in a lifetime!
You did. Good interview.
Thanks Marcy Marc!
You give one some things to ponder if he’s lucky enough to have a winning Jr. Thanks. Well worth the listen.
What I find relatively easy is when to spot when one is buying cheap and the risks are to the upside… What I find hard is to appreciate how far an uptrend can take a particular stock. I mean it was probably irrationally cheap at the bottom so why wouldn’t I expect it to perhaps get irrationally expensive before a new leg down? hmm
We appreciate your chaotic rants here amigo, and expect nothing less from The Hedgeless Horseman. š
You lay out your thoughts well and there are always some interesting insights to be gained in listening to how other investors approach the resource markets and their individual strategies.
Cheers!
A bit funny that I thought it was just a clever nick name but I pretty much am hedgeless as well hehe. I hope so! I think I have a different background than most at least.
Thanks mate!
Haha! Yes the real “Hedgeless” Horseman. “Look mom… no hedge! ”
I was impressed when we first chatted that your background that got you into mining stocks was as a poker player, and remarked then, yeah you’ll do well in Jr mining. š
“You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to runā¦”
— Kenny Rogers “The Gambler”
>> Always good to get your thoughts amigo.
It definitely is for buying! The bottom comes in today or tomorrow. Next week will be fireworks.
Silver killing it and impact on its way to greater heights..
Nothing has changed just patience as always.
Iāve been called a nut lol, but Iām personally having one of the best years in my portfolio. Not trimmed, sold, combed, styled, chopped, condensed on share long or short!
Gold remains in target within this cycle to go and attack $1820-$1840 first followed by $1840-$1880 next.
My silver call for year end $29-$30 dollars is still in the table. $35-$40 plus once gold breaks out of all time high next year 2021-2022
Scorpion looks like itās getting ready to lift off! Just my own thoughts
Glen
Just a feeling on Scorpio???
No not just a feeling wolf! A hunch lol
The technical setup combined with this current cycle that still has legs has me thinking itās going to break through at some point.. break through that 12 cents resistance.
I have not checked the stocks as yet maybe itās getting ready to.
I think a weekly close at .12 would do it…
https://stockcharts.com/h-sc/ui?s=SGN.V&p=W&yr=5&mn=0&dy=0&id=p98591232195&a=785557792
I still have more than 1.3M shares of that one (down from about 3M).
We need .125 to clear important Fibonacci fan resistance…
https://stockcharts.com/h-sc/ui?s=SGN.V&p=W&yr=4&mn=3&dy=0&id=p96277120764&a=659712508
Important speed line resistance needs .145…
https://stockcharts.com/h-sc/ui?s=SGN.V&p=W&yr=7&mn=2&dy=0&id=p10365646050&a=580081294
Agreed!
$29-$30 for silver by years end? I would be surprised if that occurred Glenfidish but who knows in this crazy world. That prediction is not crazy though in my mind.
Agreed Ozibatla. There is significant resistance at about $26- $26.50 for Silver, so I’d be surprised to see Silver at $30 by year’s end, but if it really piled on caused a massive short squeeze then it is possible, just not as probable.
Again, targets like that are getting way ahead of themselves, as Silver is still having the daily knife fight with last year’s high of $19.75. It would be technically very bullish to close today on the weekly candle above last year’s high, and earlier it got up to $19.78, and then currently is 2 ticks below it at $19.73.
Let’s see Sllver close above $19.75 today, which sets up the next upside line in the sand – the 2016 surge high of $21.23. Once that level is cleared definitively on a closing basis, then the real fireworks can start, and a move to mid $20’s will be possible.
Silver closed exactly at $19.75 today. It would have been nice to see the weekly close at $19.76 or higher, but hell it is still a very bullish move and weekly close.
Update: Correction, Stockcharts is showing Silver closing at $19.76. It was above it’s 2019 high of $19.75 several times this week, and that’s the highest weekly close in 4 years. Very constructive for Silver.
Again I completely disagree which your approach. You seem like a text book guy who comes across very conservative. Page 1, page 2 etc and thatās fine ex but Iām way more aggressive and I have done extremely well with my approach.
Im fact o will go back to the conversations we have had and your language is always after the fact On moves and never in real time. Your always trimming which reminds me of a few others in here and always seem bearish when Iām fact gold is in the move. You play an angle is to not be ā trappedā but I see through it and I think others do as well.
So I differ and believe silver will hit 29/30 and not because of what you are saying. It will probably reach those targets because if you blow up a chart itās screams silver is on a serious run. Few get it. I believe you part of the few with all respect. Just an observation.
I wouldnāt be surprised as most donāt see whatās coming and very few make pocket change. Just my own thoughts. People will play conservative 24-26 nonsense because that what they think it should be. The fact of the matter is the market moves to its own tune.
Im glad you have an open mind. What you will always get from me that few do Iām here is out calls out on real time and numbers. I donāt play conservative and for sure donāt play the if it goes to A and than b it will go to c.. lol thatās nonse for me like avi. Iāve fine tuned my way of investing and I think I hold myself pretty strong. Matt is witness that I nailed 20.80 recently on my etf bull which very few could have had. Believe it or not those calculations were based on previous work and I nailed it.
So when people say anything can happen, I hope you understand that I plan out each trade and research wayyyh before my moves and I have done well.
Cheers and thanks for your response
Erik,
A conservative approach is always wise! My saying is always itās not a race but a marathon. Thanks for your thoughts.
An interesting short piece by Steven Saville:
https://tsi-blog.com/2020/07/why-silver-will-outperform-gold-over-the-coming-year/
Like Bob Hoye, Saville shows how the gold-silver ratio is like a credit spread.
This pullback is for buying but I wonder how many will do so.
https://stockcharts.com/h-sc/ui?s=%24HUI&p=D&yr=1&mn=7&dy=0&id=p34129538697&a=640682620