Chart of the Day: Centamin

I make no apologies for covering another gold stock just a couple of days after the previous one, Highland Gold Mining (HGM). This is on the basis that we have been treated to a major break of key $1,300 resistance for the metal, and given all the uncertainties in the stock market and politics, the risk off atmosphere favours any proxy to the yellow metal.

Centamin (CEY): Above 120p Targets 160p

Perhaps the main problem with gold plays such as Egypt focused Centamin is that the price action here appeared to be comatose, even as the price of the underlying commodity bottomed out in December below $1,050. Indeed, the big turnaround for most mining shares came the following month, ahead of the general rebound seen in February for the stock market. In the case of Centamin the key near-term standouts have been the way that low of last year occurred in November, ahead of the gold low, and then the break through the key 70p resistance zone of October in January. Since then we have seen a February gap higher remain unfilled at 86p and an April gap unfilled at 91p. This suggests great technical strength with the assumption to make now being that as little as an end of day close above the recent 120p resistance could lead to a journey up to the top of a broadening February triangle at 160p. The timeframe on such a move could be as soon as the next 2 months.