Technical analysis: 21 May 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
21 May 2021, 10:00 AM

Spot Gold – Bullish breakout

In our last update on the 9th of May 2021 we discussed number of bullish developments on the chart and the emerging signs that gold is likely to be at a turning point.

The up swing extended further over the past ten days and the key dynamic resistance of US$1,850 has now been broken upwards.

The breakout of the nine-month down trend channel is the last development that confirms the correction is complete and that higher price levels are likely to unfold over the medium and long-term.

The fact that the correction retraced to its 38.20% Fibonacci retracement ratio shows that the up trend is healthy and still strong.

The weekly momentum indicators remain firmly in its bull market range also supporting our positive view on the precious metal.

The first potential upside price target is US$2,050, however over the long-term we see levels to US$2,300 as achievable.

Perseus Mining (PRU) – Ready for a breakout

PRU has been trading in a strong primary up trend over the past two years which is still firmly intact. The weekly momentum indicators remain firmly in its bull market range supporting the positive outlook for the stock.

The medium-term down trend line from the July 2020 high marked in blue in the chart below has been broken upwards recently showing that the secondary correction is losing momentum.

A break above resistance of $1.42 is highly likely in our view and would confirm that a new secondary up trend is starting.

The initial upside price target based on the anticipated breakout is $1.65, however over the long-term higher price levels are achievable.

Ramelius Resources (RMS) – Tracking well

After reaching an all-time high of $2.53 and strongly overbought momentum levels on a weekly and monthly basis a correction to unwind the overbought momentum conditions took place.

The price retraced to its 61.80% Fibonacci retracement ratio measured from the December 2017 low and crossing at $1.18 where support is solid and is likely to hold.

The price rebounded strongly over the past two months breaking its medium-term down trend line and its resistance of $1.91.

Both developments are bullish and suggest that higher prices are likely to unfold over the medium-term. The potential upside price target in the months ahead is $2.40.

Northern Star (NST) – Lifting our target

In our last update on the 22nd of March 2021 we discussed the bullish implication from the RSI breakout from oversold levels.

We highlighted the strong likelihood of the price bouncing of its key support of $8.85 and recommended clients buy the stock.

The price rebounded over the past month and our initial upside price target of $11.00 has now been reached. Earlier in the week the price broke above its minor resistance of $11.63 confirming a small continuation rectangle pattern.

The medium-term down trend line has been broken upwards recently suggesting that higher prices are likely to unfold in the coming months.

The positive development over the past month further increase our conviction on the stock and we increase our price target from $13.00 to $14.00.

Gold Road Resources (GOR) – Lifting our target

In our last update on the 16th of April 2021 we discussed the implications from the breakouts of dynamic and static resistances and recommended clients buy the stock.

The stock rebounded over the past month and the current price action appears to be ready to clear the next level of resistance of $1.46.

The weekly MACD indicator has turned up from oversold levels (bullish development) and the overall weekly and daily momentum conditions are constructive.

A subsequent break above $1.46 is highly likely in our view which could trigger higher price levels in the months ahead.

Our first upside price target of $1.50 has almost been reached and we lift our medium-term target from $1.70 to $1.80.

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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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