Boost your returns in mining with technical analysis
I have always been a bit skeptical of technical analysis because it sounds like it shouldn’t work. I once thought it was just a self-fulfilling prophecy, where investors and speculators all followed similar rules and principles when buying and selling, thus influencing the chart. I think there is some of that for sure, but ultimately there is a more fundamental reason why technical analysis works and why it’s important to learn it, especially in gold and silver investing.
Ultimately, charts of equities or any other tradable security are just manifestations of people’s emotion-driven actions when they invest or speculate. Few activities bring out people’s animal spirits as much as investing in gold and silver equities, making technical analysis a very important part of investing in them.
Many people are attracted to these equities because of the fortunes made in the past and the multiple stories of stocks that went up ten times, twenty times, and so on, making speculators rich. However, it is also a fundamentally risky business, and there are multiple things that can go wrong with these companies.
The emotions of fear and greed are apparent in these stock charts, and I believe they are the primary reason why technical analysis works, especially in sectors as volatile as mining. Investors tend to be fearful when a stock has been going down for a long time, they are greedy when a rally has started, and they usually get scared about losing their profits at some point and sell into a pullback. These are the powerful forces creating the strong patterns of volatility in mining stocks.
While I look at fundamental value first and foremost, technical analysis can help a lot in timing entries and exits of stocks. I want to be able to buy low, hold, and then ultimately sell higher. Achieving that becomes much more likely by leveraging technical analysis through a bull market.
Ultimately, this is a tool to help with buying equities when they offer the best risk-adjusted value and selling at times of overvaluation. Here at Value Discovery Media, our focus is on long-term trends and investing in them at opportune times and selling when they are closer to their end. We are happy to be helping gold and silver investing veterans John Feneck and Don Durrett set up another event on Monday, June 17, about technical analysis.
The event is called “Technical Analysis: How to Identify Tops and Bottoms and Macro Factors Driving Precious Metals Higher.” In it, they will cover the following topics:
Detailed discussion on macro factors affecting gold and silver in 2024.
Don and John usually agree on entries... but what about exits? A detailed discussion on how to identify tops and bottoms with examples provided.
Don and John will analyze five stocks each and go into detail using charts and other factors, such as RSI.
A Q&A session where participants have the opportunity to ask John and Don anything related to gold, silver, and related equities.
We are really excited about this event and can’t wait to learn John’s and Don’s methods to time entries and exits with technical analysis. If you’re interested, please read more about the event here!
Update: Due to unforeseen circumstances, the event on Technical Analysis has been postponed until a later date. Please stay tuned by subscribing to our email list!
Disclaimer: This article is for informational purposes only and does not constitute investing advice. Please consult with a qualified financial advisor before making any investment decisions.
