Yamana Gold Inc. (NYSE: AUY)

Yamana Gold Inc. engages in the exploration, development, and production of mineral properties, primarily gold. It also explores for copper, molybdenum, zinc, and silver metals. The company’s property portfolio includes seven operating gold mines, including Chapada mine, Jacobina mining complex, and Fazenda Brasileiro mine in Brazil; El Peñón mine and Minera Florida mine in Chile; Gualcamayo mine in Argentina; and Mercedes mine in Mexico. It also has a 12.5% indirect interest in the Alumbrera copper/gold/molybdenum mine in Argentina, as well as holds interests in various advanced and near development stage projects and exploration properties in Brazil, Chile, and Argentina. Yamana Gold Inc. was founded in 2003 and is headquartered in Toronto, Canada.

To review Yamana’s stock, please take a look at the 1-year chart of AUY (Yamana Gold, Inc.) below with my added notations:

1-year chart of AUY (Yamana Gold, Inc.)

From January until early September, AUY created a key resistance level at $18 (navy). That resistance level was a 52-week high breakout when the stock broke above it in September. That breakout was a signal that the stock should be moving higher, which the stock did do. Now that AUY is pulling back, the old $18 resistance should provide support for the stock, which it has already done once last month.

The Tale of the Tape: AUY broke out to a new 52-week high in early September and is now pulling back. A long trade could be made at $18 with a stop placed below that level. If the stock were to break below $18, a short trade could be considered instead.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT