Today’s trading brought us well under the 10 Moving Average line and we saw the stock close at 0.88 (-2.22%).
What the chart tells me is that although we dropped a bit further towards the 0.85 the action today was promising. The volume of shares traded has decreased and with that also the number of sellers. I see this as a positive sign meaning the consolidation is just that, a small consolidation which only purpose it is, is to get out of the overbought zone.
The other thing that’s positive is that although the stock opened lower at 0.87, we still managed to close higher at 0.88. Besides that, after opening there even was a run up to 0.90 which also was the high of the day. So that tells me that although the bears might have won an earlier fight, the bulls are already showing their horns again. Already after just two down days this stock is already showing strength. Strength in the holders that is!
The point where sellers are few and far between might even be nearer than any of us might think?
The Relative Strength Index is already nearing the 50 line which is a comfortable zone for a stock to be in and it is again attractive to investors. My guess is when we either hit or dip a little under the 50 line we can expect renewed interest, a heavily reduced number of sellers and a heavily increased number of sellers.
The stock is still not out of the woods yet but today’s action definitely should be of some comfort to holders who entered in higher, for the rest of us lower holders even more comfort and for new to be holders maybe next week will provide us with a perfect entry point…or rather a train ticket on the Orko Silver Speed train to the next stop which is a close and stay above 1.00.
Monday’s action is probably wholly dependent on what happens on the COMEX next week. I don’t really think the consolidation in gold and silver is over as of just yet.
The US is trying to start its rally after it dipped under the 76.00 last Wednesday. I see the dollar getting no further than 78.00 though. After the dollars last failed attempt to breach the 78.00 gold will not only start its march to 1033 but it will also break the all time high.
The writer is x-times as bullish on silver then gold.
For Monday I’m hoping we get a bit lower to the 0.85, until that happens we shouldn’t look to hard for any reversal or an end to this consolidation.
As always, take care and prosper!
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