Kirkland Lake Gold (KL) is our next recommendation as part of our precious metals series. We have looked at Franco-Nevada (FNV) , Newmont (FNV) , SSR Mining (SSRM) , Agnico Eagle (AEM) , Wheaton Precious Metals Corp. (WPM) , Eldorado Gold Corp. (EGO) , and Hecla Mining Co (HL) .
Let's check out the charts and indicators.
In this daily bar chart of KL, below, we can see that prices have been in a downtrend since early August. KL is trading below both the declining 50-day moving average line and the declining 200-day moving average line. Trading volume looks like it has increased in recent months and could be a subtle clue that investors have become attracted at these lower levels.
The On-Balance-Volume (OBV) line has also been in a decline since early August telling us that sellers of KL have been more aggressive. The 12-day price momentum study shows higher lows from late November to January to now. The pace of the decline has slowed and that can at times foreshadow a bottom or upside reversal.
In this weekly candlestick chart of KL, below, we can see that prices have traded down to the $35 area - a level that acted as support in April-June. We suspect some traders may be buyers again in this area. The 40-week moving average line has a negative slope now.
The OBV line is pointed down and the Moving Average Convergence Divergence (MACD) oscillator is below the zero line but narrowing.
In this daily Point and Figure chart of KL, below, we can see that prices have reached their downside price target of $36. We don't have signs of bottoming yet so further declines are possible.
In this weekly Point and Figure chart of KL, below, we can see a slightly lower price target in the $35-$34 area. Maybe technically oriented traders will begin a pattern of buying in this area.
Bottom line strategy: Reviewing these four charts of KL, I believe the stock should start to show us some bottoming and signs of more aggressive buying. Keep your powder dry for now and let's see how things develop.
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