Over the past six months Agnico-Eagle Mines Limited (AEM) has moved violently between the $52.00 level and about $74.00 per share. These movements offer investors the opportunity to add to their portfolios by buying a few more of their favorite stocks or by venturing into the more volatile options arena where a greater amount of leverage is available.
From the above chart we can see that AEM has formed two lower highs since hitting $74.00 which is worrisome for us as we believe this stock is once again undervalued, so thats a bit of a negative. However, the $52.00 level has acted as a support to AEM recently and we hoping that it will hold once again. The technical indicators are almost on the floor and suggest that AEM is now oversold so we are looking for a bounce around now followed by a reasonable rally. As we mentioned when writing about Silver Standard there are a number of political considerations to add to the pot, such as President Obama's stance regarding the banks. Should the banking sector continue to fall bringing the remainder of the market with it then the dollar could be the beneficiary and not gold and silver. Thats a chance that we may have to take but on balance we will probably move early next week.
Have a sparkling week.
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