So the juniors are smoking. ..............Is it too late to join this party? Are they, fully valued?
Lets say hardly valued at all at this point and for many reasons.
1. The underlying asset, gold/silver have been in 17 month consolidation patterns and just broken out now. It is well known in TA circles that the longer the pattern the more reliable it's potential fufillment is.
2. The normal cycle bull market has typical intermediate moves and we have not had one since 2007
3. The PM sector attracted alot of short positions and Those positions look like they are starting to come off judging from the large percentage jumps in some of the shares.
4. Without putting up another chart of the CDNX and the fantastic drop from 2007, how long do you think that type of oversold imbalance can last in a long term bull cycle?
A SH member, mentioned Silvercorp. I didn't think of it as a small cap, but I do own it, and believe it has considerable merit as a silver play, so here is MHO on Silvercorp.
Firstly, as I had discussed with lilnev2000, what I like about Silvercorp is that they have production that produces excellent cash flow. That cash flow funds their drilling and costs, which means they are not subject to financing vagarities in this tight credit market and terms and conditions from the hedge funds and banks etc. PLus that precludes them from hedging their production as collateral for financing. A clean and self sufficient way to carry on a successful business plan methinks.
Silvercorp is a Canadian company and primary silver producer, not a multi industrial metal outfit. They have excellent high grades and that helps to make for the incredible cash cost of Minus $5 per oz. yes, a minus in front of that. Also, this is one of the few silver producers that also pays a quarterly dividend. ( bonus) $75 million in cash on hand and no debt, so blance sheet is clean. IMHO, SVM is a "core holding" type of pm share. I never trade the core holdings, Trades on "Amex in the US and TSX in Canada.
From a TA point of view...... the 3 year weekly chart ( a slow view which takes alot of the short term noise out of the equation) showing it just breaking out and challenging it's 200dma. The MACD is turning upwards and RSI into bullish territory. It does look llike it is mounting a challenge for 2008 highs of just over $10. But that would depend alot on the underlying physical silver.The website of the company........
http://www.silvercorpmetals.com/And a quick update on the smaller cap juniors...
Great Panther up 34.29% today on volume of 3.4 million plus sharees traded. Sorry, I don't have definative answers to why the volume and who the buyers were. It traded as high as $1.20 today and I didn't get a chance to call mgmt, as I actually have a day job and in between was on the phone to Orko Silver mgmt which had a big news release and rise in price also. Volume on Orko was impressive, at 550,000 shares and a move of 7.69%.
On Great Panther, this is basically a "rocket pattern" and is either unwinding a heck of a short position or a fund wants in so badly, price does not matter and a cross could not be arranged. In any case...currenty is overbought, unless there is some huge piece of news that makes $1.20 a steal ( which is possible )
There are some analyst reports out on Great Panther. P. Zihlmann of Swiss Asset Mgt in europe just sent out a report last week..Orko Silver link to it's website is as follows: