Jim Cramer fields questions about stocks during the "Lightning Round" segment of his Mad Money program. I get emails from time to time from readers of Real Money. One subscriber read my three part 2021 outlook piece (see here, here and here.) and asked about Pan American Silver (PAAS) as I suggested a near term pullback in the precious metals could happen as the Dollar Index was poised for a bounce.
Let's check out the charts of PAAS.
In this daily bar chart of PAAS, below, we can see that prices tripled from March to August and have since corrected that strong advance. Prices successfully tested the rising 200-day moving average line in November and earlier in December.
The trading volume has slowly decreased since March but the On-Balance-Volume (OBV) line shows only a modest decline since August.
The Moving Average Convergence Divergence (MACD) oscillator has recently turned bullish again with its move back above the zero line.
In this longer-term monthly Japanese candlestick chart of PAAS, below, we can see the huge base pattern going back eight years. The lower shadows in recent months around $30 show that investors are rejecting the lows.
The OBV line shows a huge base too and the MACD oscillator is bullish.
In this Point and Figure chart of PAAS, below, we used weekly close only price data with a five-box reversal filter. Here a longer-term target of $83 is shown. I wonder what silver will be selling for?
Bottom line strategy: 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.
