NFTRH Update, Chart Study: Agnico Eagle (AEM)

A low priority update for gold stock traders/investors.

The gold stock sector is obviously making some nice moves toward confirming our rally/new bull market scenario.  This grind is preferable to the upside explosion of last summer and I’ll have more to write about this in NFTRH 274.

For now, a look at a gold and silver producer AEM by weekly chart.  The stock has been fanning through a bottoming pattern for the better part of a year now.  It has done this with positive divergence after registering a deeply over sold RSI.  It is also doing this at a ‘higher low’ to the 2008 crash low.

The stock is currently at the neckline to the pattern (blue dotted line) with strong resistance just above (red).  A break through these levels would target 39-40.

aem

I personally added AEM today to replace the deeply disappointing AGI, which was sold near yesterday’s open on bad Q results.  If there is one thing I will not tolerate, it is amateurish management springing surprises on me.

Back to AEM, I wanted another gold stock and this was the one I chose.  But the risk is that it has not broken resistance and I could be being hasty.  That is how I often trade, trying to coax breaks from bottoming patterns.  Anyone having done their own fundamental research or otherwise interested in trading AEM may wish to wait for resistance to be broken and turned to support.