Endeavour Silver Corp. (EXK) is a silver miner with some good-looking charts. Twitter (search for #silvershortsqueeze) and other parts of social media are receiving lots of traffic about the price of silver. I don't know why they aren't doing this with something like rhodium, which is selling for something like $17,250 per ounce. Just saying.
Historically, mining companies have done extremely well when metal prices soar. Once the price of the metal is above the cost of production it flows right to the bottom line. Also, really strong prices allow for mining of lower-quality ores and that can extend the useful life of a mine. Let's check a few charts of EXK and you can decide if you want the volatility of something such as silver futures or leveraged ETFs or maybe a well-run mining company.
In this weekly bar chart of EXK, below, we went back five years and we can see that prices broke out on the upside from a large base formation in the $2.00 area. Prices are in an uptrend above the rising 40-week moving average line. The highs of 2016 in the $5.50 to $6.00 area are a key area to overcome, but because they are back in history it may not prove to be much resistance. The On-Balance-Volume (OBV) line is strong and the MACD oscillator is bullish.
In this second weekly bar chart of EXK, below, we went back to 2007. Prices are close to breaking out of a base that extends back to 2013; it just needs a strong weekly close above $6 and some change.
In this Point and Figure chart of EXK, below, we used weekly price data. A trade at $6.50 is a major breakout and should open the way to gains to the $12 area. Not bad in my book.
Bottom line strategy: We recommended EXK way back in 2016, when we wrote, "A strong close above $4.25 could spark another advance to $6.00." I am assuming traders took profits near $6. Consider this another recommendation to buy, but your entry price may be at $6.50 or higher. Start small.
