Why Penny Stock Investors Should be Watching for a Breakout in Metals

The Penny Sleuth Features: Penny Stocks, Options and High-Growth Opportunities! Why Penny Stock Investors Should be Watching for a Breakout in Metals By Jonas Elmerraji March 31, 2011 Dear Penny Sleuther, Serious bullish setups are taking place in scores of precious metals and metal stocks right now. Here's everything you need to know as a penny stock investor to take advantage of a breakout in metals... Historically, when stocks fail to produce gains, investors have turned to "safer" alternatives like gold or silver, bonds, and money market funds. But safety is a relative term - while these alternative asset classes do typically outperform bear markets for stocks, it's a big mistake to think of metals like gold or silver as a safe alternative to the broad market. That's because the volatility on metals is often as high (or higher than) volatility in stocks. Silver, as measured by the iShares Silver ETF (NYSE:SLV) has rallied more than 115% in the last year - that's far from "safe". "One-Week Options" That Could Show Up to 1,329% In on Monday. Out by Friday. Every single time. Gains can run to 369%, 545%, 1,329% - maybe even higher. Get the chance to start booking gains like these for yourself right here... Of course, high volatility in metals isn't a bad thing. In fact, it's a good thing for traders looking for tactical buying opportunities. So, how do you use that volatility to your advantage? One incredibly effective strategy is to look for high-probability technical trading opportunities in metals, then turn to junior mining stocks as a means of magnifying a move in the metal. Because bullish breakout potential is forming in heavily traded metals like gold and silver right now, it makes sense to pay close attention to what's going on in this market. Want to see what I mean? Take a look at the charts of gold and silver futures below: These charts show both metals nearing strong resistance levels (the horizontal grey lines). A breakout above those levels suggests that precious metal bulls have absorbed excess supply of futures contracts, and that the spot price of gold and silver are free to move higher. And because small-cap mining stocks have share prices that are tied very closely to the price of the metals they mine, a breakout in either metal presents an excellent buying opportunity for junior mining stocks... Free Presentation: 6 Penny Stocks to Own Right Now... Penny Stock Fortunes is giving away SIX penny stock recommendations to all new subscribers! But you must hurry because these plays could explode at any time. Click here to watch the presentation now. Here's a rundown of three of the precious metals stocks that present attractive technicals right now: Kimber Resources (AMEX:KBX): This gold stock is seeing a strong resistance level at $1.80. Traders should wait for a break above that level before going long. Mag Silver Corp (AMEX:MVG): An ascending triangle setup in Mag Silver presents a potential buy on a move above $13. Until then, this isn't a high-probability trade. International Tower Hill Mines (AMEX:THM): Here's another gold stock that's seeing strong resistance right now. In this case, our upside barrier is right around $10.50. If THM can sustain a move above that price, shares should be able to move significantly higher. Keep in mind that I wouldn't recommend buying any of these three stocks at this time - instead, they're stocks that could make good buys if they can manage a move above their respective resistance levels. Happy Trading, Jonas Elmerraji P.S.: Just last week, I recommended a gold play to my Penny Momentum Trader readers that is buyable at current prices. Already, our options on the stock are up double digits, but I think we could see significantly higher gains on it in April. You have until 5 p.m. today to claim a lifetime subscription to PMT and every other equity trading service we produce at the lowest price possible. Click here to get the full details before time runs out... Why Penny Stock Investors Should be Watching for a Breakout in Metals is featured at Penny Sleuth. The Secret $200 Retirement Blueprint Investing in Penny Stocks What Is Technical Trading Follow the Penny Sleuth on Twitter, here. Become a Facebook Fan of The Penny Sleuth, here. The Penny Sleuth, a free e-letter, offers independent news and commentary on small cap stocks, options and high growth opportunities. We sent this e-mail to KNUMASSCN@gmail.com because you or someone using your e-mail address subscribed to this service. Are you having trouble receiving your Penny Sleuth? You can ensure its arrival in your mailbox by: Whitelisting Penny Sleuth. To end your Penny Sleuth e-mail subscription, click: Unsubscribe. The Penny Sleuth is your free and independent source for analysis, commentary and news on small cap stocks, options and high growth opportunities. At the Penny Sleuth, we give your our 100% independence pledge. That means that we never receive compensation to talk about any stocks we feature. Our editorial staff never owns a position in any of the stocks we mention at the time of publication. And we only recommend stocks that we come across in our own original research. Our pledge also means that we won't collaborate with companies who don't live up to our independence requirements. Nothing in this e-mail should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. © 2011 Agora Financ ial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202.