Great Panther Mining Ltd (GPLDF)

[Picassa]

One more silver miner that looks set to bounce hard and could produce the biggest gains is Great Panther Silver(GPL_), which, together with its subsidiaries, engages in the acquisition, exploration and development of precious and base metal properties in Mexico. The company primarily produces silver, and it also produces gold, lead and zinc properties.

If you take a look at the chart for Great Panther Silver, you'll see that this stock has been in a complete downtrend since it hit a 52-week high at $5.04 back in March. During that down move, the stock has been making lower highs and lower lows as shares fell all the way to a low of $2.52 a share. However, now the stock looks like it might be ready to break out of a near-term descending trend line that sits at around $3 a share. A move above that level with strong volume could signal that a change in trend is coming for GPL.

It's also worth noting that GPL has formed a longer-term chart pattern of higher lows as long as the stock holds above $2.50 a share. Because this is a more speculative penny silver stock, I would wait for GPL to take out $3 with volume that's well above its three-month average activity of 4.2 million shares before buying. You could buy it on any weakness with a stop below $2.50, but I would only add aggressively once it took out $3.00.