Seeing as Orko Silver Corp. has had quite a pullback as of late I thought a new review might be in order. We’ve had Orko Silver reaching a previous high of around $2.92 and then dropping to $2.10 which is a drop of nearly 30%. Lots of investors might be thinking what the heck is going on but I can tell you that Orko Silver is not alone. Most if not all silver and gold stocks have retraced by those amounts. Check out for instance Great Panther, Impact Silver and so many more miners.
My stockhouse portfolio which is comprised of mostly silver and gold stocks also took a nose dive from 105% up to somewhere in the +70% up regions so nothing all too strange going on there. It is thus not just Orko…it is across the entire board.
Lots of analysts also have been calling for a top in gold and screaming for a pullback. Well…since a couple of days gold and silver indeed have cut back on the brakes a bit. When that happens, no matter what but the miners will be sure to follow and %30 off on some of them ain’t really that big of a deal. That is to be expected and doesn’t really ruffle my feathers.
With Orko Silver we seem to have a decent level of support around $2.10 which acted as support before and is also the level to which we’ve had a run-up on 2 previous occasions, one in October and one in November 2010. So normally we should find some buyers around this level which will validate the support zone. Anything below $2.10 is a bargain when Orko Silver is concerned.
I’m not calling a bottom here mind you, just stating the fact that we are at support. The chart also shows on the Williams graph that we are heavily oversold and I’ve also marked some earlier buy occasions according to the Williams graph. We are now again at a reasonable buy level.
On the ADX chart we can clearly see -DI taking over and confirming the downtrend we’ve had as of late. The blue ADX line is still below 20 so technically we are experiencing a weak downtrend. I know how this sounds when we are down 30% but that is what the chart is telling me. For a stronger downtrend to be experienced we will have to get below $2.10 and that hasn’t quite happened.
MACD is in the negative area and also confirms the down. It is still gapping downwards and as of this moment doesn’t show a reversal but that doesn’t mean we will go further down. We will have to wait a few trading days and see if this support zone will hold.
On the chart we can also find the negative divergence where we see the share price of Orko increasing with lower highs on the MACD graph. A good moment for day or short term traders to exit and take profits would have been early January.
The next support zones are to be found around $2.00 and $1.80. Lets hope it doesn’t get that far though. I’m not that negative so I’m guessing we will hold support. Those who noticed, the last couple of months Orko has been in a rather big trading zone between $2.10 and $2.90 so lets hope that during these down days for gold and silver we keep bouncing between these 2 levels. Might be profitable for some day traders to trade support and resistance. For long term holders this doesn’t apply of course.
That’s about all I can say for now. On the weekly chart the down begins to appear on the charts but hasn’t taken over just quite yet. Weekly we are still alright.