As part of our precious metals series, we have looked at Franco-Nevada ( FNV) , Newmont ( NEM) , SSR Mining ( SSRM) , Agnico Eagle ( AEM) and Wheaton Precious Metals Corp. ( WPM) . Today, we turn our attention to Eldorado Gold Corp. ( EGO) .
Eldorado brings up thoughts of El Dorado or the lost city of gold. Sounds like an appropriate name for a mining company, so let's check the charts.
In the daily bar chart of EGO, below, we can see that the shares bottomed out around $5 back in March. The shares then made a respectable advance to the $14-$15 area, which has stopped the rally three times. EGO has shown more weakness in January when the U.S. dollar was bouncing. Prices tested the rising 200-day moving average line in late January and early February. EGO is back above the 200-day line but it may not be out of the woods.
The On-Balance-Volume (OBV) line shows weakness since the middle of November as sellers of EGO appear more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is crossing the zero line but this buy signal seems weak.
In the weekly bar chart of EGO, below, we can see that prices have been in a longer-term advance. The shares are above the rising 40-week moving average line.
The weekly OBV line has been in a decline since September 2019 and the MACD oscillator is showing weakness.
In this daily Point and Figure chart of EGO, below, we can see a possible downside price target of $7.50.
In this second Point and Figure chart of EGO, below, we used weekly close-only price data. Here we see a potential longer-term price target of $26.
Bottom-line strategy: Stand aside on EGO for now and wait for a better opportunity. Keep in mind the longer-term price target of $26 -- not bad, so we'll keep it on our shopping list.
