In mid-2010, AuRico Gold Inc. (previously Gammon Gold) declined to form the second bottom of a large “W” formation (A – dashed lines) and then began to rise above its 40-week moving average again (B) to reach a recent high of $14 (C). This confirmed the breakout from the bullish “W” pattern, which supports significantly higher targets. The current price correction should provide an excellent entry point. Only a decline below $9.25-$9.50 would suggest a trend change.
Point & Figure measurements provide an initial target of $15. The large “W” pattern supports significantly higher targets.
Monica Rizk is the senior technical analyst for Phases & Cycles Inc. Ron Meisels is a contributor to the www.NA-marketletter.com website. They may hold shares in companies profiled. Please see the site for a glossary.
Chart source: www.decisionplus.com