Pattern Play: Kinross Gold

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Kinross Gold (KGC), a Canadian based senior gold producer, broke out to the upside of a falling wedge pattern on Wednesday, September 9th. The breakout was confirmed after price closed above the upper trendline. The MACD line is beginning to turn up and appears to be on the verge of crossing above the signal line, a bullish indication. As a gold producer, Kinross's performance is intimately tied to the price of Gold, and Gold has an inverse relationship with the US Dollar Currency Index (DXY). On Wednesday, September 9th, the US Dollar Currency Index had its first red day after a 6 day rally. On Thursday, September 10th, the US Dollar Currency Index broke to the downside of a short-term bullish trendline that the Index was holding above.

Kinross's stock price has been in a long-term uptrend and a falling wedge is considered to be a continuation pattern. Price will likely resume its uptrend and advance to its 2020 high of roughly 10.25. If price can breakout above the 10.25 resistance level, then it should continue to rise to 11.25, a level last reached in 2012. As long as price holds above the upper trendline the bias should remain bullish. If price closes below the upper trendline of the falling wedge pattern then price may drop to the 8.25 support level, where it could possibly bounce. If price breaks below the 8.25 level, it would be a bearish signal and price could continue to fall to 7.50.          



Source: GAIN Capital, TradingView
Related tags: Equities Gold

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