Mining Stock Flashing Strong Bullish Signal

Pan American Silver Corp (NYSE:PAAS) stock was last seen down 3.8% to trade at $44.40 as it heads for its fourth-straight loss. The 260-day moving average-- which has provided support since April 2024-- appears to be keeping losses in check though. Furthermore, this trendline has a history of yielding strong positive returns. 

According to Schaeffer's Senior Quantitative Analyst Rocky White, PAAS is trading within 0.75 times the 260-day moving average's 20-day average true range (ATR), after spending at least 80% of the previous two weeks and 80% of the prior 42 trading sessions above that trendline. This setup has appeared eight times during the last decade, after which the stock was higher one month later 100% of the time, averaging an impressive 15.4% gain. A comparable rally from current levels would place Pan American Silver stock at $51.24. 

An unwinding of pessimism amongst options traders could provide tailwinds as well. PAAS' 50-day call/put volume ratio of 3.00 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 94% of readings from the past year.