Even the price of so-called safe havens gold and silver have fallen in recent weeks, taking down industry names including Freeport McMoRan (NYSE:FCX), Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP), and Newmont Mining (NYSE:NEM). But the group looks to be making a rebound, and I have two related names on my radar.
Silver Standard Resources (NASDAQ:SSRI), a stock that I was optimistic about, fell with the rest of the market. I originally started tracking the silver miner on the expectation that it was breaking out, along with its group, at the $15.50 level. But that was a false breakout, and shares plunged along with the price for the precious metal futures. Then, just when bears thought they had it all going on, gold and silver prices reversed again and the miners’ shares turned on a dime, only to have weakened once again.
Quite obviously, in retrospect, SSRI and its group were not yet done churning within the base that is being set. However, ultimately, I do expect the shares to turn higher, as SSRI is one of the best companies in the sector and will perform well once gold and silver prices resume their march back to last year’s highs in anticipation, rightly or wrongly, of inflation ahead.
While more speculative traders may want to jump ahead and get into SSRI, I’m not quite ready to bite yet. But one metals stock that is showing a good entry point is Yamana Gold (NYSE:AUY), a major gold and copper miner based in Canada that has become one of the leaders of the global industry in the past few years.
AUY has a shot at reaching new highs in coming weeks and in addition to the stock, traders can leverage the power of options and play calls in AUY. I’d stick with near term December contracts that are in the money, and I particularly like the AUY Dec 19 Calls at current levels near 60 cents.