On its 9-month chart we can see that Hecla rose last week to the upper boundary of its correction downtrend that began last February following an initial drop from its late January peak just above $34. Although it hasn’t yet broken out, various factors suggest that it is about to, the most important of which being its Accumulation line. This has been notably strong over the past 6 weeks or so and has even gotten above where it was at the January peak when the stock was about double its current price – this is clearly a very positive divergence that augurs well for a breakout into a significant new uptrend. The robust Accumulation line has been driven higher by strong upside volume over the past couple of months as an intermediate Double Bottom base pattern formed that now looks complete. Momentum (MACD) has been steadily improving and trending higher since late in March. Lastly, the price is still below its now flat 200-day moving average so there is plenty of upside from here. The resistance levels shown are not formidable but are worth noting as they indicate where the price may pause to consolidate on the way up.
The very long-term chart for Hecla going all the way back to its inception in 1983 is worth taking a quick look at because it reveals two very important developments this year – one is that the price blasted higher early this year to clear new highs out of what can be viewed as a gigantic trading range going back 40 years with a powerful “momentum punch” that marked the onset of a major bull market and this of course corresponds with what we saw in silver itself when it broke out of its gigantic 45-year Cup & Handle holding pattern. This being so, the heavy reaction back to what is now quite strong support, that has cut the price in half, has thrown up a major buying opportunity, especially as, as mentioned above, the Accumulation even rose during this reaction and is at the point of making a new all-time high, which is clearly very bullish.
Hecla Mining is therefore regarded as a most worthy addition to any Precious Metals / silver stock portfolio, especially as it is US based and the US government just announced action to promote mining operations in the US.
Hecla Mining website
Hecla Mining Co., HL, closed at $16.95 on 7th August 26.
Posted at 8.15 am EDT on 10th August 26.