Last up is silver miner
(SLW - Get Report)
. SLW has seen some pretty prodigious price swings over the course of 2012, rallying at the start of the year only to peak in late February and slide 32% over the next three months. But shares have rallied equally hard from June's bottom in the broad market, making their way back up to finally test their tough resistance level at $40.
In broad terms, SLW is making a very long-term rounding bottom pattern, but I think that the pattern itself is less important than the price level that's getting tested right now. Simply put, earlier this year, $40 was a price level above which sellers were far more eager to sell and take gains than buyers were to buy. If SLW can push through $40, it means that all of the weak handed sellers are out, and buyers have control back. That's when you want to be a buyer.
This is another stock that's looking good on a momentum front -- and that's especially important here given the long-term nature of this setup. Despite the run that shares have had in the last couple of months, SLW's RSI line hasn't been broken. That means that prices are still moving higher at an increasing rate.
If you decide to take this trade, make sure you keep a tight
To see this week's trades in action, check out the
Technical Setups for the Week portfolio
-- Written by Jonas Elmerraji in Baltimore.
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