Pan American Silver (PAAS) moved closer to an upside breakout today. We looked at PAAS back on December 30 and recommended that "The Point and Figure chart suggests a target that is pretty impressive. Traders should look to buy a dip under $32 and risk below $29 in the next few weeks."
Traders got that buying opportunity the past two weeks. Prices exploded higher in the past few days. Let's check out a few key charts.
In this daily bar chart of PAAS, below, we can see that prices rallied above the early January high and tested the early August highs.
The On-Balance-Volume (OBV) line moved slowly lower from July to early December but has recently shown new strength.
The Moving Average Convergence Divergence (MACD) oscillator just crossed to the upside for a cover shorts buy signal.
In this weekly bar chart of PAAS, below, we went back five years to show the long base around $15. We can see that prices doubled from the base and that makes a triple or $45 the next price target. A weekly close above $40 will be a serious upside breakout.
The weekly OBV line is positive and the MACD oscillator is getting closer to a bullish crossover.
In this daily Point and Figure chart of PAAS, below, we can see that a trade at $40 will be a new high for the move up on this chart and represent a breakout. The $61 area is the projected upside price target.
Bottom line strategy: Continue to hold longs. Wait for a strong close above $40 before adding to longs. $45 and then $60 are the next price targets.
