GPR.TO Update: 6% pop off the bottom of the triangle.

This is an updated for my GPR.TO (Great Panther Silver) post from Wednesday
 Textbook entry into GPR.TO
 

Entry: 3.85

As price action approached the bottom of the triangle mentioned on Wednesday, strong buy pressure kicked in.  This resulted in a 6% move, however this move is dwarfed by 11% in AXR.TO. 

The potential upside for this stock

I am looking to get defensive around the 6.20 area.  The key here is to wait for the triangle to get broken either up or down for a high probability entry.
Looking at this from a Elliot wave perspective, it is likely that the 4 wave triangle will result in a wave along one of the projected paths.  The significance of the triangle is that the wave 2 was a straight  ABC correction and based on Elliot waves law of alternatives this count is more likely to be correct.

"Corrective waves 2 and 4 alternate in pattern" - BASIC FIBONACCI PRINCIPLES


I will update on where stops will be placed.  However, I am going to wait for a definitive break as in this triangle it has been very volatile.

Entry into GPR.TO (Great Panther Silver) - Tight stop, low risk / high reward setup

Note the buy volume increase in the last 2 days.  There are not many sellers, leading to swing lows being "protected" by the high buy volume.

Also note:

Other stocks I have been following and commenting on are: EDR.TO, FR.TO, AXR.TO, SBB.TO
PTM.TO, FVI.TO

All of these are up and some up substantially.  With leaders such as FR.TO (First Majestic Silver) leading the pack with a 12% gain.
I regret not getting into FVI.TO as played the last leg up and was planning on entering sometime this week. Even though FVI.TO is a solid play, there is greater political risk via elections in Peru


Why GPR.TO is going to continue up?

Look at the latest update Here below is a summery of the Bought Deal that just went through.

Great Panther Silver Limited Announces $21 Million Bought Deal Financing
Thursday, 24 Mar 2011 08:56am EDT 

Great Panther Silver Limited announced that it has entered into a bought deal financing with a syndicate of underwriters led by Salman Partners Inc and including CIBC World Markets Inc, Stonecap Securities Inc, Dundee Securities Ltd, and Stifel Nicolaus Weisel Canada Inc. The Company intends to issue 5,000,000 common shares at a price of $4.20 per common share for gross proceeds to Great Panther of $21 million. The Offering is expected to close on or about April 12, 2011, and is subject to regulatory approval. The Company has granted the underwriters an overallotment option exercisable for a period of 30 days following the closing of the Offering, to purchase up to an additional 15% of the number of common shares issued pursuant to the Offering at the Offering Price. The common shares will be offered in all provinces of Canada, excluding Quebec, via a short-form prospectus and into the United States on a private placement basis.

And today......

Great Panther Silver Limited Closes $24 Million Bought Deal Financing
Tuesday, 12 Apr 2011 09:11am EDT 

Great Panther Silver Limited announced that it has closed the bought deal financing previously announced on March 24, 2011, with a syndicate of underwriters led by Salman Partners Inc. and including CIBC World Markets Inc, Stonecap Securities Inc, Dundee Securities Ltd, and Stifel Nicolaus Canada Inc., (collectively the Underwriters) fully exercising the over-allotment option, for gross proceeds of $24,150,000. 

Bought deal was completed at a price of $4.20 per share, and the underwriters had an opportunity to exercise there over-allotment option within 30 days, and they immediately exercised it.

Obviously the price being 3.84 didn't deter the underwriters, and since they were a lot closer to the company that anyone else, a minimum valuation of $4.20 would be expected.

Yamaha Gold Inc. TSX: YRI - A Look at upside potential - May 21st Options - Strike 13

Yamaha Gold Inc -> Annual report here.

Production	2010	2011E	2012E
Gold (oz.)	135,613	130-140,000	125-140,000
Cash cost (per oz.)	$327
By-product cash cost (per oz.	$(2,073)
Copper (million lb.)	149	145 - 160	140 - 160
Cash cost (per lb. of copper)	$1.17

Mineral Reserves and Mineral Resources

Gold 3.1 million oz. proven &probable + 2.5 million oz. measured & indicated
Copper 2.1 billion lb. proven & probable + 1.4 billion lb. measured & indicated
Source


This is a solid company that is pumping out millions of oz of silver and will be for years.  With these massive moves in the metal market, these stock will preform quite strongly as there stability forces investors to have to take into consideration the full implications of Silver $40 being with us for some period of time. 

I picked up May 21st - Strike 13's a couple of weeks ago.  The orange lines indicate strike (horizontal) and expiration date (vertical).  The cyan lines above it are projections for future areas of resistance.  If we are in a wave 3 as the scenario above, a fast move to one of these levels could be materializing.

Fortuna Silver: FVI.TO exited waiting for entry next week

Fortuna silver (TSX:FVI) has been breaking out very hard last two days.  I mentioned yesterday that I am becoming skeptical as we are trading above the bollinger bands which is considered relatively extreme.  Therefore today I sold my shares at 6.65 and plan to wait for a entry under the bollinger bands next week.  Considering that the price action ended at 6.43 I am confident that a bit more downside could be expected however, this stock I am very excited about.

Silver New Post-Hunt Brothers High ($40), Gold All time High ($1466), FVI.TO had 15.47% gain (all time high!)

With the dollar continuing to get crushed with events such as these looming:

• The threat of a government shutdown
• Portugal has officially asked for help from the ECB
• Japan aftershock and degrading nuclear situation
• Riots/revolutions in middle east/Africa occuring in Cote D'Ivoire, Syria, Yemen, Tunisia, Egypt, and more
• Libya where there is a full blow new war causing oil prices to sky

 It is easy to understand why Gold and Silver are seeing relentless buy pressure.  Remember the FED has pumped massive amounts of money into the system via QE1, QElite, QE2.  They are doing this by buying back Treasury bonds some issued literally 1 week earlier by the Treasury Department.  For foreign holders of US debt, their patience is running on empty leading many people to believe that the US dollar could face massive sell pressure over the next year.  This would lead to substantial inflation in the US.  If you were a treasury holder would you want to be the last one out of the door?

  Well silver has officially hit $40 twice.  I fully expect that when the stops are taken out that are around the $40 level watch out.  There could be a correction, however, $50 will be hit by Summer there is little doubt.  This is truly remarkable, as last summer the price was fighting a battle around the $18 mark.  Check out the latest price @ Kitco

All time high for gold.... Wow.  1500 will have to be touched by summer.  Check out the latest price @ Kitco   

Now to a specific company I have been trading and commented about over the past few months.

Fortuna Silver Mining FVI on the TSX:
From a technical standpoint this looks very attractive for various reasons:

• Massive Move breaking to new all time high ($6.30)
• Volume was 2.9 million where the 50 day average is 782K
• MACD had a bullish cross over
• Slow Stochastics is a 58 therefore plenty of room to run

Caveat: The move today was massive, and took price action above the Bollinger band.  Therefore, a pull back is very likely and will be a buying opportunity.

GOLD and SILVER surge

 Above is Kitco live 24 hour Gold chart

Above is Kitco live 24 hour Silver chart

Gold has broke above 1450 and touched a new all time high of 1457 and change.  Silver got above 39.00, the highest it has been in 31 years.

The S&P500 today started strong but ended flat on the day.

The divergence between metals and stock markets I believe will happen within the year.  I expect markets to roll over while metals continue showing strength. They have been so closely correlated as QE1 and QE2 worked their magic.  However, the increase in metals was I believe from the debasement of the USD.  As the stocks market realizes QE3 might not come right away, stocks will likely roll over.  However, Inflation expectations are increases and I expect more demand for the inflation hedge that gold and silver provide.  Ben also mentioned in his speech that he will tolerate "transitory" inflation.  This is a path to 5-10% inflation unchecked.  If expectations embed a Volcker style hike may be necessary to halt inflation.  We will see what the summer holds for us. I think 100-130 oil will be with us for a while.

S&P 500 update and Silver potential breakout

Above is the S&P 500 chart.  Back to the same old low volume float.  I still feel strongly that we will see a test of the 200 MA before the end of the year.  However, there is potential that the market will continue up to make new highs which will be a definitive wave 5.  If this is the case, expect a deep correction.

At some point the Fed will have to raise interest rates or at least announce that QE2 has ended with no QE3.  What is holding this market up has been the daily POMO so removing this will inevitability lead to a deep correction as the true price will need to be discovered.


Crazy stories from Zerohedge show that the US is weeks away from a full out default on US debt.  It is laughable for this to be allowed which is why I totally expect them to raise the ceiling asap.  A default of the worlds reserve currency would put global prices of commodities and companies in a state of crisis / panic.

  Break of the 38.00 level should quickly lead to an increase to the 40.00 mark.  My expectation is 50 will be hit by the end of summer or early fall.