A long-time Real Money subscriber emailed me about my recent precious metal recommendations. The reader was already long Hecla (HL) and wondered what else might be attractive on the charts. Let's take a look at Yamana Gold (AUY) .
In this daily bar chart of AUY, below, I can see that prices have soared 50% from its September nadir. There was a pullback/retest of the September low in early November. Notice the heavy trading volume, as prices took off on the upside? AUY is trading above the rising 50-day moving average line and above the rising 200-day line. We can see a bullish golden cross buy signal in December as the 50-day line moved above the 200-day line. The On-Balance-Volume (OBV) line shows a steady rise the past year, even with the ups and downs of the stock. The Moving Average Convergence Divergence (MACD) oscillator is bullish.
In this weekly Japanese candlestick chart of AUY, below, I see a bullish setup. Prices have made what I believe is a large saucer-like continuation pattern. Prices rallied to $7 in 2020 and then corrected down to the $4 area where they bottomed.
Notice the similar saucer look in the trading volume with the low around June of 2021? The OBV line made its low at the end of 2021 and its rise into 2023 is telling me that buyers are really being aggressive. The MACD oscillator is bullish.
In this long-term close only chart of AUY, below, I see a bottom pattern going back to 2015 -- seven years of accumulation. Trading volume has been increasing and so has the OBV line. My mentor Alan Shaw and my old boss Louise Yamada, used to say "the bigger the base, the higher in space." An upside breakout should open the way for a multi-year markup phase.
In this daily Point and Figure chart of AUY, below, a breakout at $7 should open the way to higher prices. So far a $9 price target is suggested.
In this weekly Point and Figure chart of AUY, below, I used a five box reversal filter to get a price target in the $15 area.
Bottom line strategy: Traders could start buying a starter position in AUY on strength over $6.19 and become more aggressive on a rally above $7. Risk below $5.25. $15 is my first target in what may turn out to be a multi-year rally.
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