Leading gold producer Anglogold is pausing in the short-term before potentially renewing its uptrend. Its share price still has large upside potential, and gold shares are very much still an area to focus on.
ANGGOLD (ANG) – Upside breakout imminent?
Recommendation: BUY (OR ADD TO) ON A BREAKOUT
Current Trend: Up on all main timeframes.
Strategy: It remains a medium-term hold; buy/add to on a close above line 2.
Chart Setup: Anggold is consolidating in a rising wedge/triangle (lines 1 and 2). It can break out in either direction. But the emphasis should be on the buy side.
- Its Stochastic is giving a series of negative divergences, which is normally a bearish sign; but so far the price is ignoring it, which shows underlying demand for the stock.
Strategy Details: Either way, it remains a core med-term hold. If it closes above line 2 (R260.75) then add to holdings. If not in, buy then. I would not short a breakdown of line 1 (R248 level) if that happens.
Target: Minimum target for an upside breakout will be R285 based on the wedge (where traders can take some profits). And for a breakdown, it’s to R230 (where one should look to buy/add to).
- Main target (med-term+) is R317.75, based on a large rounding bottom pattern.
Stop-loss: Medium-term stop a close below R210. (In the immediate short-term, use a close below R243).
- Colin Abrams is an independent technical analyst. To subscribe to more recommendations by the author, or attend trading courses, please go to www.themarket.co.za
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