Kinross needs to re-test $16.00

Jul 12th, 2010 – Comment

At this point I would say we need to re-test $16.00 to get the stock out from under the selling pressure its been under.


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kinross

Lou,

You are doing a great job! My question is about Kinross Gold. Why can’t this stock catch some traction like Goldcorp , ABX or even CGL?

Thanks,
Ed

 

Hi Ed,

Kinross Gold Corp. ( K TSX) is another fine example of a stock that trails its sector, and has investors scratching their heads. I think the best explanation for the doldrums in the stock is that as the company works toward developing some of the properties in its pipeline current production has only grown 3% from Q1 2009 and Q1 2010. The capital markets always take a stern tone when it asks “What have you done for me lately?”.

 

 

k

The three year chart generated a double top in September and October of 2009 which signaled the reversal of the uptrend that started in April of the same year. Not a long advance but can you complain about a better than 50% gain in six months?  K has given up most of those gains and needs to get some traction on its development projects.

 

 

 

 

 

k2

The six month chart provides a good view of the overhead resistance along the 200 day moving average and the breach of support at $17.25. If I were to take an interest in K I would pay attention to the MACD given that is has been a good signal generator for entry and exit points. There are  at least five good signals on the chart not the least of which was over the two week period from June 14 – 28, 2010 where the stock ran from $17.75 to $19.25. Over 8% return in a short period won’t pay all the bills but it will pay for some of them.

At this point K is a stock that you have to be willing to trade not buy and hold. The chart is generating enough signals within what appears to be a wide enough range to make the risk reward potential interesting. The stock is very liquid with close to three million shares trading daily. At this point I would say we need to re-test $16.00 to get the stock out from under the selling pressure its been under. Watch the MACD for a signal.

 

Happy Capitalism!

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