Mining stocks sky

What do you expect when Silver breaks $28 and Gold breaks the $1400 mark?

Mining stocks explode.  My current philosophy on mining stocks is that I look for at least some level of production however, junior mining stocks within the range of $1-$7.

The reason for production capacity is that the companies can capitalize on the high prices of the metal right now.   This high price will increase their revenues and will provide excess cash for growth.  With companies without production the issue is that their reverse value will increase which is great but if the metal falls 6 months from now, they didn't technically capitalize on the high price.

In addition, I noticed that at the $5 mark for mining stocks, the company becomes a "mid-tier" which start to attach a new subset of investors.  This has resulted in an explosion in many stocks that I have been following.

Below is an outline of 3 stocks that I currently own, which I purchased last week before the QE2 announcement as a hedge for a large QE commitment which ended up being quite large at $600 billion not including additional rollover.

The 4th stock is FR which I do not own however, have followed and wanted to enter many times but never had an appropriate entry.  Notice the importance of the $5 area for all of these stocks.

$5 mark breach resulted in a strong uptrend.

One of the highest producers of silver in the world.  Notice the explosion after $5.

Looking for my $5 theory to play out in SBB over the next couple of weeks.  As yesterday was the first time the stock closed above the $5 mark.  

Since August almost a 3 fold increase in price.  FR has been a monster.