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I'm Dan Fitzpatrick at Stock Market Mentor and Option Market Mentor. Today
I want to look at a potential squeeze here on Pan American Silver ( $PAAS Pan American Silver Corp ).
This is a stock, you know, guess what? It trades along with silver; but you can
see what's been happening here for quite awhile on the stock and been trending
lower,
200-day moving average was a high ceiling, it couldn't even hit that level, and
then finally we get to push above this 200-day moving average, a pull
back to test it, and now we're just going sideways.
So what do we do? Well there's a couple ways to trade this, it really just kind of
depends on your timeframe;
look at support down here at about $20.50, something like
that,
if the stock pulls back to that level
then you can make a speculative buy because you've got the 50-day moving
average just below that, I mean this is a stock that's probably not going to come
unglued; you're also now at support, then if the stock does start rallying back at
least you've got a profitable trade while you're waiting for a breakout.
Or you could just wait for a close above the upper Bollinger Band, the top band
right now is $22.21, you can see that over on the left in the
box on the left of your screen.
If the stock breaks you just set yourself a price alert, $22.21,
if the stock starts pushing above that level then you can look at it and
see if it's a breakout
or its fakeout. Ultimately I look at this
as just a consolidation phase, look at the volume,
we like it when uptrending stocks consolidate on
declining volume
because what that means is
there's not a lot of trading interest in the stock even after a move like this;
the stock starts to pull back,
trading activity is really, really heavy, that reflects profit taking, and
like a lot of profit-taking that reflects institutional selling;
they're the only ones that can generate that kind of volume, the kind of volume
that really, really pushes, you know, spikes well above
average.
So here we've got a sideways drift with a downward drift in volume,
that's a pretty good set up to me so just watch this stock
and see if it works for you, my bet is it will.
Okay members, I've got a special
intraday Strategy Session for you which, is in lieu of tonight's Strategy Session
so hope you find that useful.