SSR Mining Inc., formerly Silver Standard Resources, is a Denver-based producer of gold, silver, copper, lead, and zinc, and it owns the largest silver mine in Argentina. Additionally, it engages in exploration activities across five countries in the Americas and Turkey. Shares of SSRM.TO experienced a significant decline earlier in the year due to an accident at its Turkey operations and a halt to operations at its Saskatchewan silver mine after a severe forest fire affected the area around its Canadian facility. Despite these risks, this $1.18 billion market cap miner is now showing renewed signs of life, as its shares are breaking out of a consolidation pattern that persisted throughout 2024 between $6 and $8 (highlighted in green oval). This consolidation followed a long tail down on the point and figure chart, which occurs when the price drops significantly, indicating strong selling pressure followed by buyer resistance. This pattern suggests potential indecision in the market and may foreshadow a bullish reversal if confirmed by subsequent price action, which appears to have occurred. P&F practitioners often view a long tail down reversal as a critical indicator of support levels, suggesting that buyers are starting to enter the market after the sharp decline. We would characterize last year's price action of SSRM.TO as a textbook example of a long tail down, further supported by the reversal, consolidation, and now the breakout from this holding pattern to the upside. Turning to relative strength, shares of SSRM.TO have been rising in the SIA S&P/TSX Completion index report position chart and are currently moving through the neutral yellow zone, positioned at #60. In this chart, we have added a black line to illustrate the building relative strength and its outperformance compared to other names in this comprehensive SIA mid-cap report. Next, in the second attached chart, we drew lines on the P&F chart to show support levels currently at $7.72, which represents the top of the green oval supportive zone, and at $7.88, which is at the 3-box reversal level. Resistance is set at the halfway point of the long tail column of O's, which is the $9.99 level. This coincidentally also represents a psychological whole number and a natural holding level, supported by the current silver bullion rally. From a price objective perspective, we highlight trend resistance at the $14-$15 level, which will likely act as long-term resistance as future stock prices approach this downtrend line. Sectorally, the mines and metals sector is a favored area within SIA, and shares of SSR Mining carry an SMAX of 7 out of a possible score of 10, indicating potential outperformance against other asset classes, including equities, bonds, cash, currencies, and commodities.
You will find ample information from various sources regarding the long-term breakout that occurred on Friday with silver bullion, coinciding with Russian President Vladimir Putin's announcement that the central bank plans to add silver to its reserves for the first time. This decision is part of Russia’s broader strategy to increase its holdings of precious metals, which already include gold, platinum, and palladium. Positioned for a significant multi-decade breakout, this news was sufficient to propel the price of silver to new levels in a decisive manner. In the provided chart, we have used a monthly candlestick to illustrate the significance of this move. While we could have highlighted the point and figure, which is somewhat obvious, we instead turn to the Average Directional Index (ADX) indicator to demonstrate the strength of momentum in the silver commodity. The ADX measures trend strength, with values above 25 indicating a strong directional movement. Analyzing the ADX alongside the +DI (red) and -DI (green) lines helps assess the power of the trend. In the chart of silver in Canadian dollars, we observe that the trend is extremely powerful, with comparisons to 2010 needed to find a similarly strong rally. At that time, silver in Canadian dollars surged from $19, with the ADX indicating significant momentum, peaking at $47. Currently, we see this ADX signal occurring at $40, which appears to be setting up for further advances, with the +DI rising sharply and the ADX line crossing above the 25 level, confirming strong momentum.
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