Trading the Setup In Yamana Gold

Published on Saturday, 21 July 2012 00:40 Written by TradersHuddle Wire

New York, July 21st (TradersHuddle.com) - Yamana Gold Inc. (NYSE:AUY) ended the trading session at $14.39, near its 50 day moving average set at $15.02. Yamana's price action placed the stock below this important level, which makes it difficult to be bought, as the stock will certainly face resistance as it approaches its 50 day moving average.

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 latest price action range, defined by a peaks and troughs algorithm, placed calculated support at $14.10 and resistance at $15.17. These levels will be closely monitored, as they provide great insight into the latest price dynamics.

If traders want to establish a position in Yamana Gold, given the resistance expected as the stock approaches its 50 day moving average, a trade might materialize as the stock manages to break this important technical level. After the breakout, the 50 day moving average could be used as support going forward. However, until the break materializes, buying the stock is basically a gamble with 50-50 chance.