Tuesday, September 21, 2010

Silver Weaton Corp----Time to Short!

Silver Weaton (SLW) purchases and mines for silver and other precious metals.  Silver Weaton has had a nice run, over 67% YTD gains.  They have reported record quarters and management has certainly been doing a great job.  I like Silver Weaton as a stock and a company...just not at the moment.

SLW is wayyy overbought and should be giving back gains in the very near future.  If you examine the technicals, this stock is ripe for a fall....which it did today but regained with the Fed's announcement.  This is a huge opportunity to purchase SLW Oct 26 Puts

Here is why SLW is overvalued:

  • RSI is at 71.66--overbought territory
  • MACD is at a ridiculous 1.186--huge signal of overbought status
  • Williams%R is at -12.65---again way overbought
  • Slow Stochastics is at 85.39--overbought
  • Lots of recent buying activity
**If you do not understand what these indicators are please go to investopedia.com and look them up or wait until I make a post within the next few days of my most important technical indicators and how they are used.

As you can see, SLW is wayy overvalued and will be headed lower.  I recommend buying SLW Oct 26 Puts.  These will provide you with some very nice gains within the next few weeks when Silver Weaton takes a fall.

Disclaimer: Invest Chief is not held accountable to any loses sustained by stocks recommended. It is always important to do your own research of the stock before you invest. These trades and ideas are the opinions of the crew of Invest Chief. Invest Chief receives absolutely no compensation from companies that are recommended. We are a private organization, dedicated to promoting financial well being and prosperity.


  1. I like it. I'll see how it goes. WHat do you think of NFLX up here.

  2. Tripp: NFLX as a company (fundamentals) it is a great company. However, the technicals point to an overbought situation that is almost as bad as SLW. I would wait for a pull back on NFLX before I buy.

  3. Is this M F'er ever gonna come down, I mean I'm in at .87 I'll probably never make it back.