SLW – Silver Wheaton (Last:7.94)

The two-peaks rule applies to Silver Wheaton just as it would any other trading vehicle.  In this regard, notice how yesterday’s promising rally stopped just a hair short of the external peak whose breach would have turned the 15-minute chart bullish. We needn’t infer weakness in this instance; rather, buyers evidently were reluctant to move decisively because bullion prices were retreating. The chart yields a potentially excellent opportunity for buyers Thursday morning, since a mere 21-cent thrust would surpass three prior peaks — one of them external.  However, if the stock continues to misbehave, it will open on a gap above the three peaks, turning “everyone” too bullish for camouflage.  In any event, and just to be in the game, let’s bid 0.65 today for four September 10 calls (SLWIB).  _______ UPDATE (10:12 a.m.):  The stock opened lower, so we were able to buy the calls for 0.65, the low of the day thus far. Do nothing further for now.

Tagged as: Forecast, Silver Wheaton, SLW