Pan American Silver Corp (NYSE:PAAS) has seen choppy trading this year, most recently pulling back to familiar support at the $44 level. A fresh, strong bullish signal has the shares looking at a strong bounce off this region, however.
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 nine times over the last decade, after which the stock was higher one month later 100% of the time, averaging a large 15.4% gain. A similar move from the stock's current perch at $44.61 would have it trading at $51.47.
An unwinding of pessimism amongst options traders could provide a tailwind as well. PAAS' 50-day put/call volume ratio of 2.71 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher htan 90% of readings from the past year, showing puts being picked up at a much faster-than-usual rate.
