Trading Idea: - Is Yamana Gold close to Resistance?

Published on Wednesday, 28 March 2012 05:24 Written by TradersHuddle Wire

New York, March 28th (TradersHuddle.com) - Shares of Yamana Gold Inc. (NYSE:AUY) are trading very close to calculated resistance at $15.89. The stock ended the trading session at just $15.85, which is near levels that make it difficult to buy or start a position.

Yamana Gold Inc. (NYSE:AUY) is a Canadian-based gold producer with gold production, development stage properties, expoloration properties, and land positions in Brazil, Chile, Mexico, and Colombia. Yamana prodcued 1.05 million of gold equivalent ounces (GEO) in 2010. It has 4 development projects in Mexico and Brazil, expected to add 440,000 GEO.

Yamana's stock range is defined by its calculated support defined at $14.94 and by the resistance level at $15.89; the stock is clearly over-extended from support, making it harder for participants to establish fresh longs.

Traders don't have a clear entry point for Yamana Gold. However, as the stock pulls back towards $14.94 it will definitely provide a reference point to establish a trade. On the other hand, if the stock breaks above its resistance level at $15.89 then traders will get an opportunity to enter the stock as it moves to a higher range.