Kinross Gold Corp living in tomorrow country

Feb 14th, 2011 – Comment

Like many gold stocks K is living in tomorrow country. It is forecasting a near double in gold production by 2015 but even that promise isn’t doing much for investors today.


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Hi,
Would just like to know what is the status of Kinross Gold? We bought it at 20.94 and it goes down to 16.70 everyday and comes up to 16.95…. Any tips?

Thanks

Lance

Hi Lance,

I last posted with regards to  Kinross Gold Corp. ( K TSX) on July 12, 2010 for Ed. At that time it was clear that K was in a downtrend and would have to retest $16.00. The charts will provide some answers to your questions.

The three year chart depicts the scenario described in mid July of 2010 as the stock continued to sell off and did in fact retest $16.00. From there it took a run to a high of $20.00 by mid October and then gave it back as it once again retested lows at $16.25 in January and February of 2011.

I would call K a cardiac stock. It will give you thrills and spills but you have to actively trade this stock to make a profit. Buy and hold is not the right way to go with this one. The other thing to keep in mind is that even as the price of gold has moved higher K has failed to move with the commodity. To me that’s a disconnect that should not be ignored.

The six month chart illustrates the buy signal that the MACD generated in August of 2010 and the sell signal that appeared in early October of the same year. There was another sell signal generated in late December of 2010. Which brings us to mid February of 2011 where the MACD is again bending lower and suggesting a sell.

Kinross is scheduled to report its Q4 results on Wednesday February 16, 2011 providing investors with a flex point. Will it bounce off $16.25 or give up more value will be revealed after the release. The company provided a preliminary operating report for 2010 on January 14, 2011 that failed to move the stock higher.

Like many gold stocks K is living in tomorrow country. It is forecasting a near double in gold production by 2015 but even that promise isn’t doing much for investors today. The best outcome that I can see in the near term is that the stock continues to trade in a range with support at $16.25 and resistance at $20.00.

Happy Capitalism!

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