Technical analysis of RANGY still looks positive at the moment, with a near term target of $6.35!
gold-eagle.com
Randgold is moving higher and has now broken clear of the shallow bear channel, A-B, in which it had been trapped since late 1997. The upper boundary of that channel – like all other lines derived from the gradient of master line M – was resistance a little more than a week ago, but a new surge in the price has now taken it through and clear.
If the rising trend is sustained, the likely near term target is the top of the symmetrical megaphone I-B, with line I the inverse of B (now at $6.35). Megaphones tend to contain volatile moves, so that the rise to line I – if achieved – could be quite fast.
Scenario 1: The price fails to sustain the break above line A and falls back into the bear channel to resume the mostly sideways trend.
Scenario 2: The price moves higher – with first a goodbye kiss on line A a small possibility – to reach and test resistance at line I, thereby completing a new move across the megaphone..
Preference: The price in a sense 'had the opportunity' to remain within the bear channel on the recent trend reversal at line A, just before the break. The break higher, after a nice increase in turnover (on the JSE) to show good demand, holds promise of further gains, probably to resistance at line I. Scenario 2 is preferred..
Line I as top boundary of a megaphone should be more substantial resistance than line A. If the price should break higher on reaching line I, it would be a very bullish event.
Lastly, the moves within channel A-B and the recent bull trend in the price may seem of little consequence against the extent of the chart. However, the scale of the chart is enormous, due to the very high prices (up to $27.35) reached earlier (February 97). The width of channel A-B is about three times the value of line B; the recent rise in the calculated US price since the rebound off line B in December last year is all of 214%!!
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