Tuesday, September 14, 2010

Technical analysis Fortuna Silver Mines

Here is a 3 month chart of Fortuna Silver Mines on Sept 14st, 2010 at 8:25am PST.    (Click on the chart for a larger view)  Fortuna Silver Mines was a company listed in the article last week on Silver miners entering profitable phase.

  • Fortuna has made higher highs and higher lows since the Aug 4th low at $2.10. Bullish
  • The price is above the three moving averages of 15, 50 and 100. Bullish
  • The 15 dma crossed over the 55 dma on 8/4/10. (Indicated with a white arrow) Bullish
  • The 15 dma crossed over the 100 dma on  8/19/10.  (Indicated with a white arrow) Bullish
  • The 50 dma crossed over the 100 dma on 9/1/10. Bullish 
  • The MACD Histogram is above the center line and rising. Bullish
  • Stochastics K and D are above the 80 level. Overbought / Bullish
Fortuna has been trading fairly flat near the 2.15 area for most of the spring and summer. It rose to the $2 level last year in Nov and has gone as high as $3 and backed off in a small trading range between $2 and $2.20 area.  It basically consolidated over the summer and is now breaking out to the upside with the spot Silver price increasing. As of early trading today, it has taken out the old $3.01 high set on Jan 11, 10.  

Based on a Fibonacci retracement between the high and low, the 161.8 level is at $4.66. 

Fortuna released drill results last week from the Don Luis II vein, located in the undeveloped western portion of the Caylloma Mine. (Peru)  With growing Silver/Gold reserves, seasonals, possible short squeeze and increasing Silver spot price, the stock should continue to appreciate going forward. 

Disclaimer: I own shares of Fortuna Silver Mines in the 'long' position. 

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