Gold is on the move. It has broken through its 200 day moving average at $1,130 USD/oz earlier this week, and keeps on moving higher. For now, there is fresh energy in the gold market; pessimis made place for momentum. There is still some upside potential until $1,200 USD/oz, where gold will face major resistance.
Meantime, gold miners are moving higher as well. The gold mining indexes, like the GDX and HUI, show a recovery from a major bottom, basically nothing really interesting. But we have hand picked one extremely interesting chart of a mid-sized gold miner: Detour Gold. The company has a market cap of $3B, production from one important gold mining, several exploration activities, production of 505k ounces of gold in 2015, and a cash position of $160M at the end of 2015.
We are not into fundamental analysis of mining companies, but we simply look into the charts, and try to read what the market says about it. When it comes to Detour Gold, the market says that it is a great stock with great fundamentals. Our own view is that it is one of the best looking gold miners out of several hundreds we are tracking. Both the long and short term charts are great, as they show a confirmed breakout.
The weekly chart confirmed a mega breakout in January of this year. The descending trendline goes back to the peak of the price of gold in 2011.
The shorter term chart shows a confirmation as well, although with a different setup. We do not think we should add any comment, as the chart speak for itself.
Detour Gold is a great stock to hold. There is not much resistance on its chart. We would like to recommend to become cautious as soon as gold hits major resistance at $1,210 /oz.