Oversold stochastics and near horizontal trend line support. Will it hold?

We started buying BTG today. Let’s see if this is a false breakdown below the horizontal trend line I’ve drawn on the weekly chart. A $3.2 billion market cap with a 5.78% dividend today, with a PE just under 11% are just a few things to like about this miner.

Let’s see if platinum hold up or works higher next week.

Just a quick daily chart of the GDX, they say a trend line isn’t valid unless it has at least three points of contact. I took the liberty to draw one, wondering if the third contact it is nearing now, will be where it halts it’s recent decline? In the meantime, I took advantage of the pullback today to nibble here and there on several of the holdings in our portfolios, keeping my overall TR fixed as a percentage of my portfolio. Essentially this give me less room on the downside before I have to stop out, because I have the same amount of dollars at risk over larger position sizes, but it also gives me more shares to ride higher if I am correct and they change course soon.

New Gold was bought yesterday before the close of trading, below are both daily and weekly charts. In the current price zone seems like a good area for the stock to find support, both the trend and the stochastics suggest. I also like how the moving averages are shaping up on both charts. Essentially, we are buying a strong stock after a good-sized correction, realizing that metals prices (fundamentals) will still be the most important factor driving the stock price. I consider this a mid-cap producer with exploration potential that could increase reserves.

Yesterday I shared the portfolio changes, but when I want to clarify how I invested the SILJ proceeds. The equal-weighting I mentioned was within similar companies, the mid-caps vs. junior explorers, but I invested 75% of the funds into the mid-cap producers, only 25% in the junior explorers, and in each group the fund were equal weighted in each miner. So the bigger miners split 75% among them, the juniors only 25%, and I chose to equal-weight the positions in each, meaning the mid-caps’ positions are 3X more each than the amount invested in each junior explorer. I figured the 75/25 split was appropriate to compensate for the higher risk in the juniors.

Today I decided to sell out of SILJ after the fund was changed over to Amplify funds from the ETFMG managers it had before. I didn’t like their new portfolio as much, so I put the proceeds from the SILJ into a basket of 16 individual miners I prefer and some PSLV, the physical silver etf managed by Sprott, Inc. Many of the miners I bought have been mentioned here in articles over the last year, but some are new.

I equal-weighted the following names, HL, CDE, EQX, FSM, PAAS, SBSW, SVM, DSVSF, SILV, AYA.TO, ORLA, GLGDF, EXK, JAGGF, GATO, and DV.TO plus the PSLV. I will add to these positions into declines, and might buy some new names if the opportunity presents. I have some other junior explorers/producers I did not add to today, like NSRPF, MGMLF, and IRVRF, but I want to stay focused on the mid-cap producers at this point.

Quick daily of Sibanye, this is a platinum/palladium miner, which I started a position in today. I also added to CDE, HL, SVM, GLGDF early in the day. Both CDE and GLGDF finished the day up nicely, the former up 7% and the latter up over 15%.

I was looking to place a horizontal trend line at the area with most contacts, and it looks to me that platinum might now be at the lower end of a wide range, and a possible buy. I will also look into palladium this weekend, and if it is similar, will be inclined to buy some miners in that group as well. A stock like SBSW is trading at just 4X earnings of $1.05 last year, a valuation that is hard to ignore.