Agnico Eagle Mines Ltd (AEM.TO) (Daily Stock Report)

by SIACharts.com

DAILY STOCK REPORT: AGNICO-EAGLE MINES (AEM.TO)

When comparing resource prices and resource stocks, its generally considered that stock prices tend to lead resource prices. The reason for this is that implicit within a resource stock price is investor sentiment toward future price and production levels.

The Gold price staged a big surge in late 2023, hitting a new all-time high at one point, and has recently levelled off between $2,000 and $2,080 in what appears to be a pause to digest previous gains. Recently, however, gold stocks have started to retreat and fall down in broad market relative strength rankings suggesting that gold may potentially be vulnerable to a deeper correction, particularly if treasury yields and the US Dollar continue their comeback.

Agnico Eagle Mines Ltd (AEM.TO) for example, has lost 9.0% in the last month, while the price of Gold (GC.F) itself is down 0.9% over the same period. AEM.TO has dropped 8 positions in the SIA S&P/TSX 60 Index Report over that time and yesterday it returned to the Red Unfavored Zone for the first time since October. Agnico has been out of the green zone since June.

Candlestick Chart Shows Upward Momentum Faltering:

For over a year, Agnico-Eagle Mines (AEM.TO) have been stuck in a sideways trading range between $60.00 and $80.00. This neutral trend has been reinforced by the formation of a Symmetrical Triangle of higher lows and lower highs, but with that pattern closing in on its apex, decision time may be approaching.

Last month, the shares peaked at a lower high near $75.00 and since then, they have rolled down under $70.00 and fallen under their 10-week moving average, which now reverse polarity to become initial resistance. Initial downside support appears in the $60.00 to $62.50 area.

Should that area hold, the sideways trend may continue. If AEM.TO keeps falling and takes out $60.00, however, it would signal the start of a new downleg that could potentially retest support at the summer 2022 lows near the $50.00 round number.

Point and Figure Chart Downshifts into Neutral:

A fall rally in Agnico Eagle Mines (AEM.TO) shares ran into resistance just short of $75.00, established a lower high. In recent weeks, the shares have started to roll downward, completing a bearish Double Bottom pattern and taking out a previous resistance level that had become support.

While a correction appears to be underway in the short-term, the long-term picture remains more neutral with an uptrend of higher lows intact and a Symmetrical Triangle forming. A close below uptrend support near $62.50 would signal that a deeper downturn may be starting with next potential support at the October low near $58.90. Initial resistance on a bounce appears near $71.85 based on a 3-box reversal.

With its SMAX score falling to a bearish (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) 5 out of 10, AEM.TO is exhibiting short-term weakness against the asset classes.

Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

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