PAN AMERICAN SILVER SHARES NOW TRYING TO HOLD ON FOR DEAR LIFE

Pan American Silver

stock was – as of our last check-in on September 5th – on the verge of a bullish hold of technical support at $13.31. That level of support failed miserably and the stock continued lower until this week's low of $11.72. The $11.72 level happens to represent the 261.8% Fibonacci price projection for what appears to be the third wave move lower (wave “iii” on the chart) in a five wave sequence. From here, technicians are calling for a potential fourth wave counter-trend bounce up to one of three possible Fibonacci resistance levels - $12.57, $13.10 and $13.53. Will silver futures cooperate with PAAS's bid for a bounce? Technicians note that the underlying commodity for PAAS – silver futures – may be due for a counter-trend bounce as well. They note, however, that the trend in silver is clearly lower and that lower prices are still very likely for the metal in the near future. In this situation, playing the long side in a stock or futures contract is very risky and the downside on a stop out can become pretty painful in a hurry. So, be careful out there if you are considering trying to catch the falling knife in Pan American Silver! Those wishing to play the short side in PAAS shares are a bit late to the game at current levels, but could easily jump aboard once PAAS once a bounce occurs to alleviate the short-term oversold condition in the stock.