ECU SILVER...
originally published April 25th, 2010

It looks like the time has finally come to buy back into ECU Silver. Before going any further it should be pointed out that ECU has an offputting 307 million shares in issue, and while this would normally prevent us from taking an interest in it, the company has assets and reserves to match or more than match, as its reserves are much more than 3 times those of many junior mining companies with 100 million shares. Nevertheless, given the quantity of shares in issue, we can look for solid gains, but are under no illusions that this is going to make a "moonshot".

On the 5-year chart we can see how ECU ramped up in 2006 after a major dicovery, but then, after a top pattern formed it went into a relentless and protracted decline that only ended early last year. A Double Bottom formed during 2009 from which it attempted unsuccessfully to break out later in the year. Although it didn't succeed in breaking out of the base or from the long-term downtrend shown, the high upside volume on this move was bullish, and it did also serve to arrest the decline of moving averages, which have since flattened out. Over the past several months it has crept sideways in a low narrow range, with volume dying back in a bullish manner, to arrive at the breakout point of the long-term downtrend, a fact which few are probably aware of. It is now in place to stage an upside breakout that against the expected background of a rising sector could lead to rapid and considerable gains.

Just how quiet ECU has become in recent weeks is evident on its 1-year chart, on which we can see that volume has died back to a very low level as the price has tracked sideways in an increasingly tight range. Given the positive background factors, not least of which being that the sector looks set to take off higher, an upside breakout looks likely soon.
ECU Silver is regarded as a strong buy here for solid if not spectacular gains, and is regarded as a fairly conservative investment by the usual standard of mining stocks.
ECU Silver website