First Majestic (AG) Surges 9.18% on Short-Term Bearish Reversal – Is This the Catalyst?

Summary
• First Majestic (AG) rockets 9.18% to $17.535, piercing its 52-week high of $18.08
• Intraday range spans $16.54 to $18.08, with turnover surging to 13.7M shares
• Technicals signal short-term bearish reversal (看跌吞没) amid long-term bullish momentum
• Options frenzy: 2026-01-09 expiry sees 225K+ contracts traded, with leverage ratios spiking above 19%

First Majestic’s explosive 9.18% rally has ignited a technical fireworks show, with the stock breaching key resistance levels and triggering a cascade of options activity. The move defies its short-term bearish pattern, raising questions about catalysts and sustainability. With the 52-week high now in play and leveraged options trading surging, investors must decode whether this is a reversal or a volatile correction.

Bearish Engulfing Pattern Sparks Short-Term Reversal
First Majestic’s 9.18% intraday surge emerges from a classic bearish reversal setup. The stock opened at $16.585, trading down to $16.54—a level that triggered algorithmic buying as the price tested the 30D support band (16.61–16.74). A bearish engulfing candle formed as the price closed above the prior day’s high, creating a short-term reversal signal. This move coincides with the RSI (42.9) dipping into oversold territory and the MACD (-0.16) hinting at momentum exhaustion. The surge appears driven by technical traders capitalizing on the 52-week high retest and leveraged options liquidity, rather than fundamental catalysts.

Leveraged Call Options and ETF Neutralization: Navigating the 52W High Rebound
• 200D MA: $9.8877 (far below) | 30D MA: $15.338 (below) | RSI: 42.9 (oversold)
• Bollinger Bands: $14.56 (lower) | $16.29 (middle) | $18.02 (upper, near 52W high)
• MACD: 0.78 (bullish) | Histogram: -0.16 (momentum waning)
• Key levels: 16.61 (30D support), 18.08 (52W high), 14.56 (lower BB)

First Majestic’s technicals present a high-risk, high-reward scenario. The stock is testing its 52-week high while battling a short-term bearish engulfing pattern. For aggressive bulls, the AG20260109C17 and AG20260109C17.5 options stand out. The AG20260109C17 (delta 0.64, IV 78.17%, leverage 19.22%) offers a 5% upside payoff of $0.865 per contract, with high gamma (0.233) amplifying gains if the price breaks above $17. The AG20260109C17.5 (delta 0.519, IV 83.32%, leverage 25.72%) provides a 5% payoff of $1.075, leveraging its 230% price change ratio. Both contracts have turnover exceeding 78K, ensuring liquidity. Traders should monitor the 52W high ($18.08) and 200D MA ($9.89) as critical inflection points. If AG breaks above $18.08, the AG20260109C17.5 becomes a high-gamma play; below $16.54, the bearish pattern validates.

Backtest First Majestic Stock Performance
First Majestic Silver (AG) experienced a significant intraday surge of approximately 9% on August 4, 2022. Following this surge, AG's performance can be analyzed as follows:1. Earnings Performance: AG's Q2 2022 earnings preview indicated a consensus EPS estimate of $0.00 (-100.0% Y/Y) and a consensus revenue estimate of $159.94M (+3.8% Y/Y). Despite the earnings decline, the company has historically beaten revenue estimates 50% of the time over the last 2 years.2. Stock Price Movement: After the surge on August 4, 2022, AG's stock price continued to show positive momentum. As of November 28, 2022, AG had surged by 7.2% to reach a four-month high. This movement suggests a strong market response to the company's performance and outlook.3. Production and Revenue Increase: AG reported a 75% year-over-year increase in quarterly revenues to a record $204.9 million, attributed to the processing of Ermitaño ore and the sale of inventory. The company also set a new quarterly production record in Q3 2022, with 8.8 million silver equivalent ounces produced.4. Future Prospects: The sale of AG's royalty portfolio to Metalla Royalty & Streaming for $20 million in Metalla common shares is expected to provide AG with a much better year ahead, assuming a sharply rising silver price. This transaction could serve as a catalyst for further growth, especially with increased mine production anticipated at Ermitano and Jerritt Canyon in 2023.In conclusion, AG's performance after the 9% intraday surge in 2022 has been positive, driven by strong revenue growth, production records, and favorable market conditions. The company's strategic moves, such as the royalty portfolio sale, indicate a promising outlook for the coming year.

Break Above $18.08 or Revert to 52W Low? AG’s 52W High Test Demands Immediate Action
First Majestic’s 9.18% surge hinges on its ability to sustain above $18.08, the 52-week high and upper Bollinger Band. A close above this level would invalidate the short-term bearish engulfing pattern and validate the long-term bullish trend (200D MA at $9.89). Conversely, a retest of the 52W low ($5.09) could trigger a deep correction. Investors should prioritize the AG20260109C17.5 for a 5% upside scenario and watch Newmont (NEM)’s 2.47% rally for sector sentiment. Immediate action: Break above $18.08 to confirm bullish momentum or retest $16.54 to confirm bearish exhaustion.