As silver (SILVER) is consolidating we start seeing some strong recovery in silver miners. We got particularly attracted by First Majestic Silver (AG), the largest pure silver play. As a reminder, we refer to this great piece we wrote last October: First Majestic Silver Miner Poised to Benefit From Rising Silver Prices. Every single word in this article still applies, and, arguably, is becoming even more important with the day.
The issue that most investors face with silver miners (SIL) is this: consolidation. We wrote recently that the Silver Miners Chart Signals ‘Time Is Not Ripe’ … Yet. However, we continue to believe that Silver Investing In 2018 May Become Very Profitable.
As said many times by the research team at InvestingHaven markets in consolidation are nerve-wracking. The vast majority of investors tend to go all-in or all-out. However, smart investors build up positions in a gradual way. Note, they also exit positions gradually once a bull market matures.
Even InvestingHaven’s research team got confused last year when we wrote Silver Miners Going Sideways, Not Bullish Nor Bearish. The fight between bulls and bears is confusing.
However, the smartest approach, as said, is to leverage opportunities and build up positions during a consolidation period. First Majestic Silver is one of those silver stocks that provides enormous leverage on the silver price.
If our prediction about the coming silver bull market, likely starting in 2018, will come true then it is now the time to take a position in First Majestic Silver. Its chart says it all: a breakout from a falling trend took place in recent weeks. What’s interesting is that this is a silent breakout, and smart investors love this. No media coverage, no fuzz, just supply/demand dynamics at work.
Note how, most likely, there is a rounded bottom which started in the summer of 2016, bottomed in January of this year, and is likely to set a series of higher lows in the next weeks and months. This is a textbook chart pattern, one that is very bullish.
There is still some time to get in, but, as seen many times over time, silver being the restless metal, the rally can come sudden and go very hard. We would not be surprised to see First Majestic Silver’s stock price go to its highs of $25 late this year or, ultimately, next year.