Gold stocks have been working on forming a bottom since the big October crash which took many gold miners to all-time lows and brought the Market Vectors Gold Miners ETF (ARCA:GDX) to below its 2008 Global Financial Crisis low. As the sector has begun to move back up during the past couple of weeks, some charts are breaking out from powerful chart pattern bottom setups.
One stock which stands out from the crowd due to several key technical characteristics is Detour Gold Corporation (TO:DGC), (OTC:DRGDF):
Some of the key bullish technical characteristics of the DGC chart:
- Price is at a 4-month high as it breaks out from a head and shoulders bottom
- Volume is increasing as price moves higher (a key sign of confirmation)
- There is a volume-by-price “air pocket” between $11 and $13 that goes back to the September sell-off
- Relative strength is breaking out to 6-month highs and still has plenty of room before it enters ‘overbought’ territory
Detour is a highly attractive acquisition target due to its mine locations and size as pointed out by our James Fraser in November. The technicals offer a near term target ot $13+ and many fundamental analysts have valuations above $15 for DGC shares. Regardless of which way you look at it, Detour Gold looks to be heading higher.