Pattern Play: Kinross Gold
Jason Lubin September 10, 2020 4:05 PM
Kinross Gold has broken out to the upside of a falling wedge pattern.
Kinross Gold (KGC), a Canadian based senior gold producer, broke out to the upside of a falling wedge pattern on Wednesday, September 9th. The breakout was confirmed after price closed above the upper trendline. The MACD line is beginning to turn up and appears to be on the verge of crossing above the signal line, a bullish indication. As a gold producer, Kinross's performance is intimately tied to the price of Gold, and Gold has an inverse relationship with the US Dollar Currency Index (DXY). On Wednesday, September 9th, the US Dollar Currency Index had its first red day after a 6 day rally. On Thursday, September 10th, the US Dollar Currency Index broke to the downside of a short-term bullish trendline that the Index was holding above.
Kinross's stock price has been in a long-term uptrend and a falling wedge is considered to be a continuation pattern. Price will likely resume its uptrend and advance to its 2020 high of roughly 10.25. If price can breakout above the 10.25 resistance level, then it should continue to rise to 11.25, a level last reached in 2012. As long as price holds above the upper trendline the bias should remain bullish. If price closes below the upper trendline of the falling wedge pattern then price may drop to the 8.25 support level, where it could possibly bounce. If price breaks below the 8.25 level, it would be a bearish signal and price could continue to fall to 7.50.
Source: GAIN Capital, TradingView
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.