Silver Stock breaking out on big volume this week.
The stock currently has a $65 million market cap and the potential to run alot higher if the assays deliver.
One of the most interesting stock breakouts I noticed this week was Summa Silver, it’s a stock I have been following since 2020 and looks like it may have some room to run after it’s breakout this week. Let’s take a look at the weekly chart first, before I get into the story.
Volume - This had 4 times average weekly volume this week on its breakout, which is what you want to see, as buyers came in strong and pushed the price up. This was actually the second highest weekly volume ever on this stock.
Sector Strength - Silver is currently outperforming the $SPX and is one of the few areas of the market showing alot of relative strength right now, this makes the probability of winning the trade much higher.
Relative Strength - The indiviual stock just turned the corner and is now actually breaking out against the $SPX, this is another trait of winning stock.
Moving Averages - The stock broke out to a new one month high and is above both 10 week and 30 week Moving averages, which are both turning up.
Resistance - There is the potential for the stock to get a little choppy between the .90 cent and 1.20 range, but if buyers are strong enough and silver continues to move up, I would expect it to move the through the area pretty quickly. After that it’s pretty much clear skies for this one.
These are some of the things I look at technically for a winning stock. Now let’s dive into the fundamentals a little bit.
The stock didn’t release any news this week, which makes me like the breakout even more. As silver moves up, this stock is showing to be very responsive to that move. They have been drilling their property in New Mexico since September, and we can expect assays to start being released on that anytime, which gives this even more upside.
Here is the news release on that drill program .
The capital structure is really good on this one, with Insiders and large investors owning almost 75% of all shares, which creates a lot of strong hands owning the stock. If they can deliver, this is headed higher.
Management checks all the boxes with this one, the CEO had a big part in discovering the Nexgen uranium deposit in Saskatchewan, and the senior geologist discovered the 8 million ounce Blackwater gold deposit in B.C. It’s a good team and they’ve been able to bring on alot of high net worth investors.
The Mogollon project is where they are currently drilling in New Mexico, was a former silver mine. They drilled 6 holes in 2021 and all of them delivered and were very impressive at depth. MOG22-05 was 31 metres of 448 g/t silver EQ.
They think there is nearly 50 km of unexplored vein and structure present on the property. The goal with the current drill program is to test some of these targets and come out with another initial resource. The have only scratched the surface and the potential is here for a huge deposit.
The Nevada property is just as impressive and they have had alot of success with the drill already there. The CEO discusses both properties in this presentation, which I have linked to below.
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