First Majestic Silver Corp. (NYSE: AG)

First Majestic Silver Corp. engages in the acquisition, exploration, development, and production of mineral properties with a focus on silver projects in Mexico. The company owns and operates six silver producing mines, including the Santa Elena Silver/Gold Mine, La Encantada Silver Mine, La Parrilla Silver Mine, Del Toro Silver Mine, San Martin Silver Mine, and the La Guitarra Silver Mine.

Take a look at the 1-year chart of Majestic (NYSE: AG) below with my added notations:

1-year chart of Majestic (NYSE: AG)

Since peaking back in February, AG seems to have formed a clear, trend line of resistance (red). The AG trendline of resistance is currently approaching $6.75, and a break above that line should mean higher prices, overall, for the stock.

However, being that the $6.50 support (green) just gave way, it would appear that the stock is headed down to the $6 support (blue) level first before any attempts at breaking the trendline might occur.

The Tale of the Tape: AG has a down trending resistance. A break above that resistance should mean higher prices for the stock, thus a long trade could be made. Until then, the stock appears to be headed lower.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT