Coeur d'Alene Mines
Major uptrend approaching...
15 March, 2005
The technical formation with which the layman is most familiar
is the "Head-and-Shoulders" reversal, but in the world
of precious metals stocks, the formation that has been most prevalent
over the past few years is the "Pan and Handle" base,
a particularly bullish pattern that points to a period of sustained
and substantial advance.
It is no coincidence that this
should be the dominant formation showing up amongst mining stocks.
In the old days prospectors used to pan for gold, and therefore
it is obvious that the spirits of the 49ers and of a host of
other goldbugs and prospectors of yesteryear are communicating
with us through the charts telling us that we are on to
a good thing.
A particularly fine example
of a sign from our forebears is the chart for Coeur d'Alene.
The 1-year chart is, viewed in isolation, a rather dreary picture
that reveals little. Following a period of decline early last
year, the trend has remained neutral. However, the 5-year chart
shows a fine, clear "Pan and Handle" formation, with
the price now completing the Handle part of the pattern. After
a steep decline earlier last year, the price has stabilized in
a converging symmetrical triangle pattern. The Handle part of
the pattern is a very large consolidation area that serves to
correct the overbought excess that resulted from the price blasting
upwards out of the Pan base.
The price has already started
to push up above the top line of the triangle, and with the 200-day
moving average flattening out and the 50-day soon to rise up
through it, the stage is set for renewed advance. A break above
the November highs at about $5.25 will be a bullish development
that should usher in a period of more rapid advance.
Coeur is regarded as a strong
buy at this juncture with a stop below important support at $3.
This stop may seem to be set rather low, but still affords a
highly advantageous risk/reward ratio, given the upside, and
readers always have the option to set a stop at a level where
it is personally acceptable.
As a bellweather stock, the
bullish outlook for Coeur d'Alene augers well for silver stocks
generally and for precious metals stocks in general.
Coeur d'Alene Mines CDE
on NYSE, closed at $4.27 on 14th March 05
March 15, 2005
is an English technical analyst, holding a diploma from the Society
of Technical Analysts, Cambridge, England. He lives in Chile.
Visit his subscription website at clivemaund.com. [You can subscribe
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a consequence of trading on the basis of this analysis.
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