First Majestic Silver (AG) is a Vancouver based silver mining company than operates in Mexico. From a technical point of view, price has recently tested a major support area in the 15’s and has generated a new buy signal.
AG and the entire sector retraced in tandem with the Gold pullback to the 1750 area thanks in part to a more hawkish outlook than expected from the Fed during a recent FOMC meeting. Economic theory aside, what is most attractive about AG is the reward/risk. IF price can stay above the 15 support, it is within reason to see a push into the low to mid 20’s over the coming weeks.
Keep in mind, the upcoming NFP report can cause a further bullish reaction, or a bearish one. There is no way to know how the MARKET will interpret the outcome. When it comes to swing trades, it is better to follow the rules, rather than trade on opinions and logic.
The 15 dollar level has held 5 times over the previous months which is clearly a major level for this stock. It is also a broader higher low which favors a bullish break out into the low 20s.
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Here’s the swing trade idea:
Risk is the priority, not the reward. These trade ideas don’t always work out, and on occasion go straight to the stop loss order. While the current economic situation favors a weaker dollar and stronger metals, price does NOT have to subscribe to such logic. The interpretation of tomorrow’s NFP report can change things quickly.
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