Sierra Metals Inc. (SMTS)

Sierra Metals stock forecast: buy or sell

Sierra Metals stock outlook

  • Sierra Metals closed yesterday at $1.25 (2.46%) prior to reporting financial results at
  • The stock is configuring an uptrend pattern since mid-May, when it bottomed at $0.65. Up to date, shares marked a 92.31% gain since the beginning of this rally
  • Sierra Metals Inc. focuses on the production, exploration, and development of precious and base metals in Peru and Mexico.
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Important note:
The thoughts given in this post are personal and not recommendations for you to buy or sell shares. The author of this report does not have any knowledge of the specific scenarios of the reader, his or her finances or his or her own best interests at any given time. All users should speak with their financial advisor before buying or selling any securities Thoughts are provided for education reasons only

Sierra Metals stock chart overview

Should I buy Sierra Metals stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is SMTS stock a buy?

Currently, Sierra Metals stock doesn't match any of these trading strategies, so our recommendation is not to buy now. This doesn't mean SMTS will slide in coming sessions, or it will not rise higher. Simply, it doesn't match our recommended trading systems

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Should I sell Sierra Metals stock?

"To sell or not to sell", if you are holding Sierra Metals stock?. In the same way as when we have to buy shares, choosing when is appropiate time to sell is not a fickle decision, and we must follow our own trading strategy. We like very simple strategies to guide us on when is a good time to sell a stock. Be aware that these strategies are not intended for selling short Sierra Metals stock

A golden rule is that you should never keep a trade that results in higher than expected losses upon the buy. The timing to sell your stock must always be ruled by the stop-loss (automatic or manual)

Is it time to sell Sierra Metals stock?

In the current situation of Sierra Metals there is not any eligible sell setup, so Sierra Metals stock holders with operations in profit can keep their positions

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Analysts' recommendations to buy or sell Sierra Metals stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

We don't have any rating published in the previous 30 days for Sierra Metals

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Technical analysis

Sierra Metals stock started an uptrend in mid-May, and gained an amazing 92.31%. The price action shows rising tops and bottoms, and along the way gave very few entry points for those who wanted to enter. Latest low was on June 18, when price bounced at $0.74. Like in all uptrends, price needs to take breath and currently price is consolidating the gains in a range between $2.75 and $0.74

SMAs overview

Moving averages are indicators for investors to measure direction. A moving average is the average price of a stock over a set period of time. Moving averages are usually calculated on different periods depending on the trading timeframe 21, 50, 100 and 200 days are the most usual moving averages. Learn more about Moving Averages from sources like Wikipedia and Investopedia

Supports and resistances

Market investors use support and resistance levels to identify price points on a chart that may act as obstacles, containing the price of shares to move up or down. A support level is a level where the price may stop as it falls. This means that the price is more likely to "bounce off" this level rather than break through it. However, if the price breaks down this level, it is likely to continue descending until finding another support level. In contrast, resistances are where the price may find resistance as it rises. In the same manner, the price is more likely to "bounce off" at this level, and if it finally breaches this level, the price will rise easily until it approaches the next resistance

The current resistances are:

  • R1: $1.26 (0.8% above)
  • R2: $1.29 (3.2% above)
  • R3: $1.30 (4% above)
  • The current supports are:

  • S1: $1.22 (-2.4% below)
  • S2: $1.15 (-8% below)
  • S3: $1.09 (-12.8% below)
  • Bollinger bands

    This is an indicator that was developed in the 1980s by John Bollinger. It consists of 3 bands that are drawn superimposed on the price evolution chart:

    • The central band is a moving average, usually a simple moving average calculated with 20 periods
    • The upper band is calculated by adding to the value of the simple moving average 2 times the standard deviation of the moving average
    • The lower band is calculated by subtracting from the simple moving average 2 times the standard deviation of the moving average

    Relative strength index

    The relative strength index (RSI) is a technical indicator used in the analysis of financial markets. It is intended to plot the current and previous weakness or strength of a stock or market based on the closing prices of a recent trading period. Like other oscillation indicators, the RSI fluctuates from 0% to 100%. J. Welles Wilder introduced the relative strength indicator in the late 1970s and since then it has been widely used by investors

    The RSI dropped below the overbought level of 70 on June 23 after just crossing to the overbough zone for a single day (weak signal). The RSI value yesterday was 56.39. Sierra Metals stock dropped a 26.47% since then

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    Earnings and financials

    Q1 shareholders event was hosted by Sierra Metals in late March after releasing the financial report. The consensus earnings estimate is a an Earnings per Share of $0.04, that is a - higher than Q4 quarter. Sierra Metals missed Wall St estimates and reported earnings of %s a share of $0.03, that is a -25% less than the previous predictions of $0.04.

    Same quarter last year, reported EPS was $-0.01, so recently reported EPS means an increase of 400%. Sales merely changed on an annualized basis in the 1st-quarter, from $55.0M to $55.6M last quarter.

    Sierra Metals will host the quarterly earnings call. If you own or you are considering buying Sierra Metals stock, be on alert as financial reporting day usually has a very high volatility, and price can gap up or down with very low liquidity and not honouring your buy or stop-loss orders. You can find more details about the earnings conference call and the earnings reports on the Investor Relations section of its website: http://www.sierrametals.com.

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