Good Setup Developing in Yamana Gold

Published on Sunday, 24 June 2012 00:32 Written by TradersHuddle Wire

New York, June 24th (TradersHuddle.com) - Yamana Gold Inc. (NYSE:AUY) closed the trading day at $15.15, near its 50 day and 200 day moving averages set at $14.73 and $15.43 respectively. Yamana's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.

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 Gold seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in Yamana Gold and wait for the stock to break out above the 200 day moving average at $15.43. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $14.73 breaks, it could signal further downside for Yamana Gold in the horizon.