On April 6, we penned a bullish story on McEwen Mining (MUX) talking about the chart picture, indicators and an upgrade from our quantitative service. We concluded that "A rally to $3 looks like the next step up for McEwen." With today's gap up and spike to $3.27 intraday, an update is needed.
In this daily chart of MUX, above, we can see how prices have gone up threefold this year! Impressive. Volume is increasing with the advance and this supports the bull case. The On-Balance-Volume (OBV) line has been moving higher since the fourth quarter of 2015 and is still pointed up. Prices look extended but there are no bearish divergences to give us a heads-up on a correction.
This weekly chart of MUX, above, is bullish and will be more so if we close the week above $3. A weekly close above $3 opens up $5 as the next longer-term price target. Prices are above the rising 40-week moving average line. The OBV line is pointed up on this time frame and there is no bearish divergence between price and momentum. Yes, prices are extended and what chartists call overbought, but when a security or index is overbought and still rises, then it is very strong. Prices have moved up quickly but investors are still being aggressive to buy now and not wait for a possible correction. Getting in is more important than buying in at a particular price.