Invest in Silver Wheaton Corp. (USA) (NYSE:SLW) In Corrections

Posted On 16 Aug 2013

Tag: NYSE:SLW, Silver Wheaton Corp. (USA) (NYSE:SLW)

Denver, CO, 08/16/2013 (Avauncer.com) – Silver Wheaton Corp. (USA) (NYSE:SLW) (Closed: $27.13, Up: 7.92%) opened flat on Thursday but soon gathered momentum to rally hard and closed near the session high. The volume at 14 million was way higher than the average volume of 5.5 million. This 7 day long rally produced a breakout move. The ground is set for a bigger move as the volume is beginning to rise too after a long time.

The stock had made its long term bottom at $2.51 in 2008 and the next tremendous bull run took it to $47.60 by April 2009. The subsequent correction made a bottom at $17.75 in June 2013. Some signs are there that it might be a long term bottom. One of those is the duration of the correction, which at 32 months took about the same time as the previous rally of 30 months. The correction took the form of a Double Corrective where the middle wave is the X-wave, an Irregular Flat. A double Corrective is two corrections connected a counter trend move or X wave. The magnitude of the first correction, from the 2011 top of $47.60 to the 2011 bottom of $25.84, was about 22 points. The same for the second correction, from the 2012 top of $41.30 to the 2013 bottom of $17.75, was about 23 points, not very far from the first correction. This time & price similarity points to $17.75 being a major bottom, which is also at 66.6% retracement level of the previous rally of 2008 to 2011.

From April to August this year, a very symmetrical Inverse Head & Shoulders pattern was created with the neckline at $23.65. This pattern, broken this week, gives us targets of $26.51 which is already achieved and $30 in the coming days. But a move towards $29.50 or $32 levels is very much possible too.

The investors could buy this stock on any dips.

About the Author

Eric Shireya is a former newspaper section editor and reporter who has been reporting on Fashion and Lifestyle for about 10 years. His work has been published in national business trade magazines, and can be found on wire services, in daily newspapers, in university alumni magazines, on the web, in newsletters, and more. His career highlights have included interviewing Bob Hope, laughing through a phone conversation with Richard Simmons, chatting with Melissa Etheridge, and enduring a press conference in a hot air balloon.