Dallas, Texas 04/17/2014 (FINANCIALSTRENDS) – Agnico Eagle Mines Ltd (USA) (NYSE:AEM) on the daily chart has seen a sell off right from the day it hit aintra day high of $35.46 a few days ago. The stock has witnessed momentum based selling that is the price action has been followed up by huge volumes. The stock has broken below important support zones at $29.40 and it slipped further in yesterday trade.
The stock currently trades below its 50 day moving average which is at $32.21 and also its 200 day moving average at $28.77 which we believe would be strong resistance if the counter tried to bounce back from current levels. The momentum indicators for the stock are showing signs of bearishness and have given a clear sell signal. The relative strength index for the stock has been in a downward slide and therefore both these indicators make us believe that the stock might retest levels of $25 in the very short term.
On the weekly charts, if Agnico Eagle Mines Ltd (USA) (NYSE:AEM) closes at current levels it would form a bearish engulfing candle which is a very bearish sign and warrant a sell off in the stock as the high of the weekly closing for this candle would become a very good resistance for the stock. This would make us believe that the stock might fall further and retest levels of $22 on the weekly charts in the very short term.
Agnico Eagle Mines Ltd (USA) (NYSE:AEM) and Yamana Gold announced yesterday about a acquisition agreement with Osisko Mining Corporation for a total amount of C$3.9 billion in which C$ 1.0 billion would be paid out in cash and the rest in the companys’ shares. The news wasn’t received very well by the street and they sold into the company and drove the stock price of the company lower by close to 9.0%