Trade: EXK (Silver miner)

I bought 1000 shares EXK at 4.96 on 2 Sep.  This is a play on strong recovery upon touching an important support.  As can be seen on the chart, EXK (and many other silver miners) pulled back since mid-Aug along with silver spot.  It tested the support at $4.2 in end-Aug when its stochastics has also reached oversold level.

Overselling is never a good reason to buy a stock.  EXK bounced on heavy volume on 1 Sep, printing a bullish engulfing candle.  It gapped up on heavy volume, retaking the 50 sma and 9 ema, on 2 Sep.  I took this as a confirmation of the bottoming action on 1 Sep and entered a position.  In the very short term I won't be surprised to see some pull back.  A pull back on light volume to the gap ($4.59 - $4.69) region would be another buy opportunity.  I set a stop just below $4.2.  Target is the recent high of around $6.  Reward to risk around 1.3 is not a screaming buy.  However, looking backward this year, there were 4 times stochastics falling to oversold and then recovered strongly.  Each time EXK was able to make a new high.  Possibly silver miners are in a major bull market.  I will be a buyer at these situations until the Market tells me the phenomenon no longer holds.

This is the chart for silver miners ETF (SIL):

Weekly chart showing SLV printing a bullish engulfing candle right at support: