Clive Maund

GOLDEN MINERALS...

originally published January 17th, 2015

With silver set to take off higher imminently, Golden Minerals looks like a “steal” here at its current very low price. To look at its price charts you would think it is on the point of going bust, instead of being debt free with $10 million in cash and plenty of assets and exploration potential – but such is the stupidity of investors, who were prepared to pay over $28 for this stock in 2010, and now grumble about paying 50 cents.

We can see the brutal bearmarket in Golden Minerals from its 2010 highs in its entirety on its 6-year chart which shows its entire history. It hit bottom late in 2013 and has been in a bottoming process at a very low level ever since. We’ll now look at this basing pattern in much more detail on its 2-year chart.

On the 2-year chart we can see the base pattern that has formed from late 2013 above a clear line of support that has put a floor under the price on 3 distinct occasions now – this is a sign of disciplined and pre-determined Smart Money accumulation. Assuming the price lifts off the 3rd low, which it is expected to, the pattern will complete as a large Triple Bottom. With the price being down close to the support just as silver is shaping up to take off strongly higher, this looks like a near-perfect entry point here.

The 6-month chart is of little use technically, but shows us recent action in detail. On this chart we can see that downside momentum (MACD close to neutrality) has dropped out, making it easier for the stock to advance.

Conclusion: we appear to be at an excellent entry point for this speculative junior silver stock, which is not considered to be all that speculative because of its assets and debt free position. If you wish to set a stop in case it breaks lower, the suggested price level is $0.39 (avoid setting stops at round numbers). Upside potential from here is very large. The company has 62 million fully diluted shares in issue, and as we have seen the stock trades in good volumes on the AMEX.

Golden Minerals website

Golden Minerals Company AUMN on AMEX, AUM.TSX, closed at $0.51, C$0.61 on 16th January 15.