Time for Phase 3 in Coeur Mining (CDE). (June 30, 2015)
I want to look at Coeur Mining ( NYSE:CDE ) here; silver miner. Remember last week, or I think maybe the week before, this was in this volatility squeeze. A really tight squeeze and then you get a pop outside the upper Bollinger Band and then this is just a textbook move. A breakout from tight Bollinger Bands on volume, you’ve got to expect more continuation, and that’s what we get; stocks don’t go up forever. and then we get a reversal.
That first move is done, now you stand aside, let the stock come back, just stand aside and wait for it, wait for it. Now we’re getting back to where we’re testing this level here, the pre-breakout congestion. Boom! So now the stock’s here, we don’t know that it’s going to bounce. If you remember what the chart looked like at the beginning of the video, yes, you do know it’s going to bounce, it did bounce.
But as we’re looking at this yesterday, we don’t know it’s going to bounce, we just have to watch for the bounce. We know that typically somewhere right in between these two arrows is where you’re going to typically see a volatility squeeze come back, test that level, and then start to move higher. If it doesn’t start to move higher then it’s still testing the level but it’s likely to just continue to fall.
So I’m giving you a way to really look at these things, to really assess them. I talked about this at the “Invest Like a Monster Conference” this last Saturday, about a way to classify these things. Phase one is a breakout. Phase two is a pullback to around this prior level of support. And then if phase two leads to a move higher, where the close is higher than the open, then that begins phase three, in which we look for a breakout and then a move higher; in other words a higher high.
So you can trade this again right now using Monday’s intraday low of 5.46, you can use that as a reference for stops. If this move is going to work this stock should stay above this 5.46. So you’re basically risking 25 cents if you are making this trade right now. That’s my analysis of Coeur Mining ( NYSE:CDE ).
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