I wrote an article on Wednesday night for Investopedia on Gold Miners and how they are at a critical juncture right now. In the article, I highlighted a few stocks to watch, but found another one today that I hadn't traded before. It looks pretty decent on the daily chart and has had good relative strength when compared to the other miners. Before revealing the chart, here is the introduction to the article along with the link for anyone interested.
With the recent strength in the U.S. dollar, gold and the companies that mine it have been mired in a correction. While these stocks have been correcting their move to recovery highs since late last fall, from a broader perspective it's clear that these stocks have technically been in a wide-trading range. The mining stocks recently tested the bottom of the range and turned higher, hinting that an end to the correction could be near. Currently, the gold miners are in a critical area on their charts, with a break above near-term resistance hinting at a resumption of the uptrend, and a move lower hinting at a larger topping process.
The additional stock I found is Allied Nevada Gold Corp. (Public, AMEX:ANV). While the price action in ANV is very similar to some of the others highlighted in that article, I like that it is close to an all time high. ANV also rallied a little longer than the other miners, carrying over into the New Year rather than topping out in November.
ANV has been correcting the past rally much like the other miners, with the consolidation taking place in a much larger lateral trading range. ANV has held the low $12's on a few occasions and that is a clear support level. ANV is currently in the middle of the trading range, but the recent move above $14.50 is a positive for it. This was an a level of importance as shown by a few turning points in the stock at this level. It appears that ANV is headed for a retest of the recent highs after this move. It may be emerging as one of the leaders in this group from a price performance perspective and I will be adding it to my watchlist.
Good Trading,
Joey
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