SIA Charts’ Relative Strength rankings not only help investors to identify which stocks in a universe are outperforming and underperforming against their peers, but also when relative performance trends are changing from a sector perspective. With the price of Gold soaring to new all-time highs, Silver has also followed suit on the back of Gold’s movement upward. Today, we are going to look at Fortuna Silver Mines Inc (FVI.TO). This is the first time we have highlighted Fortuna Silver in our Daily Stock Report since March of 2022, and it has recently entered the Favored Zone of the SIA S&P/TSX Composite Index back on April 3rd of this year while climbing itself out of the Red Zone earlier on March 11. Yesterday, FVI.TO finished in 2nd position, up 8 spots on the month and up 208 places in the last quarter. Since entering the Favored Zone back on April 3 at a price of $6.16 the shares have appreciated by 38% based on the closing price of $8.50. The TSX Composite Index has been basically flat in the same time frame. In looking at the attached 5 Year Candlestick chart of Fortuna Silver Mines, we see that the shares reached a peak of almost $12 back in early 2021 then a significant downtrend ensued sending the shares to its bottom at $3.00 in September of 2022. The shares trended sideways over the next few years finding a higher low at the $3.75 level twice in October of 2023 and February of 2024. Once the shares found its support at the $3.75 area on the second occasion the shares screamed higher, breaking above prior resistance at the top of the trading range at $5.50, and marching its way to its current price level of $8.50. With such a strong move up since February, the shares could find near term resistance forthcoming at just under $10.00. On a pullback, support can be found at the $6.50 level.
In the attached Point and Figure 2% Chart, we also see a similar pattern with a bottom at $2.90 in September of 2022 and then another bottom at higher low of $3.60, but in this P&F chart vs. Candlestick, we see clear support of $3.60 at four distinct times. Those test happening being Oct-Nov of 2022 followed by Oct 2023 and Feb 2024. On the fourth occasion the shares screamed higher breaking above a long-term downtrend line at $5.26 in April of this year followed by a brief 3 box reversal in April and then a new column of 16 more X’s to its price of $8.50. FVI.TO is currently approaching a cluster of resistance points at the $9.52 to $9.71 area and above that, another cluster of resistance points near $10.52. To the downside, support can be found at its 3-box reversal point of $7.81 and below that, its 67% retracement level of $7.08. The shares currently exhibit a bullish Double Top pattern. With a bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 10 out of 10, FVI.TO is exhibiting short-term strength against the asset classes.
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