Richmont Mines Inc. has been trading within a descending parallel channel for the past five years (dashed lines). Recently, the stock pierced above this channel (A) to signal the end of the negative trend and the start of a new up-leg.
Technical indicators including the rising 40-week (200-day) moving average, the volatility system indicator (VSI) and the moving average convergence/divergence (MACD) (see lower panel) confirm the bullish status. Richmont Mines could pullback toward $3-$3.25. Only a sustained decline below $2.75-$3 would reverse the current up-side potential.
Measurements provide a target of $6.50 (a 53-per-cent appreciation potential from current levels). Higher targets are visible.
Ron Meisels is a contributor to the http://www.NA-marketletter.com web site. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.
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