From the high of $19.79, Yamana Gold Inc. (Friday’s close $xx.xx) had an extremely sharp decline to $4.29 in 2008 (A-B), a recovery rally to $15 in 2009 (C) and another decline to about $9.50 in mid-2010 (D). Subsequently, the stock settled in a wedge formation consisting of higher lows and lower highs (dashed lines). The recent breakout (E) followed by the pullback toward its 40-week moving average (F) should provide a good entry point. Only a decline below $12.50-$13 would be negative.
Point & Figure measurements provide targets of $17 and $19. Higher targets are also visible.
Monica Rizk is the senior technical analyst for Phases & Cycles Inc. (www.phases-cycles.com). 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
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