Another miner has hit our radar screens as this sector has simply been the hottest one so far in 2016, and looks like that momentum higher could continue. Agnico Eagle Mines Limited (TSX:AEM) has a really nice technical chart with many bullish characteristics all signaling further upside potential.
When looking at the stock from a weekly perspective, a golden cross, which is a highly reliable bullish pattern where the 50 day moving average (dma) breaks above the 200 dma has just occurred. As if that wasn’t enough, the stock is right on a key resistance level, that if broken could propel it much higher. As mentioned, a key resistance level around $43.50 stands in the way of further gains in our opinion. Above that, more resistance would likely come in at $45.40 and $54.40. Looking at support, $42.50 would likely be minor support along with more at $39.00.
Our trade strategy would be to enter the stock upon a break of the $43.50 level on strong volume. Upon a successful entry, we would be holding onto the stock until the $54.40 level marking significant upside potential. On the low end, when in the stock, we would place the recently broken resistance turned support at $43.50 as our stop loss point to ensure minimal downside risk.
The stock price direction for the day for AEM:CA is UP. The stock is experiencing a strong uptrend as of late, with an increase of more than 8 percent in the last five days. Based on BullishInvestor.com’s proprietary algorithms, AEM:CA is currently signalling NEUTRAL.
The most recent Candle Stick pattern for AEM:CA is the Belt-hold.
There are two possible reasons for the Hold rating currently given to AEM:CA. The first reason is that there may be indecision among the technical indicators or most of them may be neutral for AEM:CA. If the stock chart looks flat lined or is in the midst of a trend direction change, most likely this is why AEM:CA is showing Neutral. If, however the stock is currently in a visible up or down trend, the reason for the Hold may be because the BULLISH or BEARISH rating has already passed.
The last BUY was registered on Oct 08, 2024 when AEM:CA was trading at $ 106.71. Armed with this knowledge, there may still be some more strength left in this current trend or it may be near a tipping point, the market has not given a clear indication yet.
As such, it may be a wise decision to hold your stock or continue to wait on the sidelines in AEM:CA until BullishInvestor.com changes the rating for AEM:CA.