Kinross Gold Corporation (NYSE:KGC) May Rise More Above $5.65

Denver, CO, 07/23/2013 (Avauncer.com) – Kinross Gold Corporation (USA) (NYSE:KGC) (Closed: $5.57, Up: 8.37%) jumped on Monday on the back of a rise in gold with a volume of 15.5 million, slightly higher than the average volume of 12.5 million. This stock, as expected, traces the same path as gold but the formations are different.

The long term chart of KGC shows one of the most bearish patterns that kills the investors gradually – the Rounding Top. After the IT bubble of 2000 burst, the stock bottomed at $1.14 and rallied to $8.70 before settling into a range of $4.50 - $9.30. The 3 year long range was broken in 2005 and the price went to $27.40 in 2008 to make the final top. After a sharp selloff, the price recovered and then started to fall gradually tracing the Rounding Top pattern. Now it’s back to the old support of that $4.50 zone. In the period of 2002 – 2005, the price had made low 5 times in the zone of $4.50 - $4.80. The low of June 2013 was bang in that zone, at $4.53. So we can expect this major support to hold for some time if not stage a short term reversal.

There is not much sign of a serious reversal yet. The major support notwithstanding, we see some positive divergence in RSI & MACD in both the weekly and daily charts. In the last one month, price has made low 5 times in $4.53 - $4.55 showing the strength of the support. But to really capitalize on this demand zone and the positive divergences, the price must break and sustain above the weekly downtrend channel. The upper boundary of the channel stands at $5.62 - $5.65 which resisted yesterday’s rally. But any bounce from here should be taken as a bear rally only as long as the stock fails to cross $7.95 - $8.20, which is a distant dream for now.