Aurcana Silver Corp (fka AUNFF)

[Will Munny]

I have charted the company vs. the SLV (in blue) year to date. Many mining shares are highly correlated to the SLV and spot silver but they tend to lag and lead each other quite randomly in the short term. This gives us an opportunity to indicate when short term prices may be too low in regards to the underlying asset. I expect Aurcana to reverse and retrace upward toward the price of silver. The straight line of support from January and February should hold and since nothing but positive news regarding increased production and mill expansion has been coming out. By mid to late 2012 it is estimated that the Shafter Mine in Texas will produce 3.8 million ounces of silver per year. The SLV sits just above the 61.8 retracement and looks to be a good profit taking point to take some position off, for short term traders.

Same chart with the addition of SPY, QQQ, DIA and GLD to show silver's volatile price action has effected Aurcana and moving drastically independent of the overall equity market and even gold. One of the reasons I love the junior resource sector.

$0.90 per share is a fair price for Aurcana in the current environment. With a floor of $0.68 and a ceiling just above $1.08, this will create some volatile price action on the way back up. Even if silver maintains it's correction, the share price should rebound somewhat. I like the company in the medium term from these levels and think Aurcana has further potential to expand production even more.

charts @
national economist