Trading Idea: Is Yamana Gold Breaking Out?

Published on Sunday, 03 June 2012 11:44 Written by TradersHuddle Wire

New York, June 3rd (TradersHuddle.com) - Shares of Yamana Gold Inc. (NYSE:AUY) closed the session at $15.59 just above calculated resistance at $15.08. The stock moved to what appears to be a higher range, spurring attention from momentum buyers.

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.

The stock was trading in a well defined range with support at $14.08 and resistance at $15.08. Given that this range was broken, traders will be closely monitoring Yamana's price action to gather clues on the future direction.

From a technical perspective, it can be expected that previous resistance becomes support, as the new range gets defined. However, given that Yamana Gold is still near the broken resistance level, traders will be focusing on the $15.08 level to see if the stock holds the breakout without rolling over.