Buy Yamana Gold Inc. (USA) (NYSE:AUY) For Fast Move In Short Term
Denver, CO, 08/16/2013 (Avauncer.com) – Yamana Gold Inc. (USA) (NYSE:AUY) (Closed: $11.47, Up: 6.01%) opened flat on Thursday but gathered momentum soon to rally a lot and closed at the high of the day. The volume at 15.5 million was well above the average volume of 8 million. The price actions of this session and the session to come on Friday are very significant.
The volume pattern clearly shows a saucer type formation, i.e. a peak in the period of July to October of 2012, a gradual decrease thereafter and again rising now since April of this year. This increase in volume in the lower levels with price bouncing from the lows is a clear sign of accumulation with bullish connotations.
The stock had made its previous major top and bottom in the same year of 2008 – high of $19.93 in March and a low of $3.31 in October. The next rally took the price to a new life high at $20.59 by November 2012. The crash in gold in the last few months affected the stock to a great deal and it fell to $8.55 by June 2013. This is the 66.6% retracement level of the entire rise from 2008 bottom to 2012 high and hence a very significant level.
The fall from the 2012 top took the form of a Zigzag correction, nicely contained in a perfect channel. The last part of this correction was a Double Corrective and the last part of that was an Extracting Triangle. The target implication of a Double Corrective is an 80% retracement of that, which gives us a target of $14.24 - $14.31. The channel and the triangle both were broken out of yesterday. The channel gives us a target of $15.40 in the coming weeks. Resistance is expected to come in the zone of $12.75 - $13.15.
Investors could go long at the current price or on any dip near $11.10 - $11.20 for a fast move up in the near future.