Shares of Barrick Gold (GOLD) experienced a significant surge of over 9% on Monday following the release of better-than-expected second-quarter results. The Canada-based gold miner benefited from buoyant gold prices and robust production, which helped to ease concerns over output. The company reported gold production of 948,000 ounces, surpassing estimates of 905,800 ounces.
Technical Analysis: Breakout From Flag Pattern
Taking a closer look at Barrick Gold’s weekly chart, the stock has shown strong momentum. After finding support around the 50-week moving average (MA) in early June, the shares posted four consecutive weekly green candles. This was followed by the formation of a flag pattern, indicating a continuation of the upward trend.
The breakout from the flag pattern occurred this week, with the stock closing above the respected 200-week MA in Monday’s trading session. Additionally, the relative strength index (RSI) is approaching overbought territory, suggesting strong price momentum.
Key Price Levels to Monitor
As Barrick Gold shares continue to rise, investors should pay attention to three important chart levels that are likely to attract interest.
The first level to watch is $18.15. Although the stock closed above this level on Monday, it remains significant as a horizontal line connecting multiple peaks and troughs dating back to September 2021. This level could transition from providing resistance to offering support during retracements.
A decisive close above $18.15 could lead to a rally towards $20.20. This area on the chart may generate selling pressure due to a trendline linking comparable price action between March 2021 and May 2023. Additionally, there may be overhead resistance from a multi-year downtrend line connecting the prominent August 2020 and April swing highs.
If the shares continue to climb, they could reach $25. This level is likely to attract sellers looking to book profits near the May 2021 swing high. It also aligns with several trading levels around the April peak.
Closing Thoughts
Barrick Gold’s shares experienced a significant surge after the release of better-than-expected second-quarter results. The technical analysis suggests strong momentum, with the stock breaking out from a flag pattern and closing above the 200-week MA. Investors should monitor key price levels at $18.15, $20.20, and $25 for potential future movements.
Disclaimer: The comments, opinions, and analyses expressed in this article are for informational purposes only. The author does not own any of the mentioned securities. Readers should conduct their own research and consult with a financial advisor before making any investment decisions.
Source: Investopedia
