Unfortunately, Kinross Gold (KGC) has become a casualty of my negative outlook on the equity indices heading into the October cycle lows. It is not showing relative strength, and in fact at times exhibits outperformance on the downside, which tells me there is liquidation coming out of the junior miners.

That said, my near-term momentum work is showing some glaring positive divergences as KGC again presses into the 14.80-14.60 area, around which the Oct 2008-Sep 2011 support line cuts across the price axis.

In addition, the large coil pattern exhibited on the enclosed weekly chart is attached to an 8-year bull move in KGC. This instructs me from a longer-term technical perspective that as long as the "bullish" multi-year consolidation pattern (the coil) retains its integrity, a long position is warranted.

At this juncture only a violation of the most recent significant coil coordinate at the May 2011 low of 13.84 will damage the integrity of the 2008-present coil pattern.

Traders may want to look to enter or add to a potential long upon seeing a technical (reversal) signal in the "buy window" between 14.77 and 13.84, or even intraday between 14.50 and 14.20.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.