The 4% drop in gold price yesterday coupled with unfavorable news in the Euro zone triggered a minor sell off in some mining stocks in the Philippine Stock Exchange today. Some of them include Lepanto Consolidated Mining Companies A and B (LC/LCB), Atlas Consolidated Mining & Development Corporation (AT) and Philex Mining Corporation (PX) which were down by around 5%. Among the 3 mentioned stocks though, Philex Mining Corporation could still be the most attractive at this point in time.
Technically, Philex Mining seems to be at a weak state given that it has broken below its 50, 100 and 200-day moving averages as well as its MACD sliding at the negative territory. Although bearish in short term, Philex Mining appears to be sitting right at its 1-year uptrend and could possibly bounce back up since this level opens up buying opportunity for some traders, investors or even managed funds. If Philex Mining rebounds, the immediate resistance we could look at is the 4-month downtrend line. If that breaks, the next resistance could be Php23.50 marker. On the downside, Php20.00 is a strong technical and psychological level of support. If that breaks, the next support could be Php18.50.