As gold tries to rebound from its 3-year uptrend line (kindly see my colleague’s post here), gold mining companies would most likely rebound as well but with what can be seen in Lepanto Consolidated Mining Company “A” or LC as listed in the Philippine stock market is more than just a rebound.
In my technical analysis, LC’s 5.7% gain today gave its stock chart a sexier look. This move drew clearer the possible handle of what could be a 5-month cup and handle chart pattern. If you look at the picture above, a breakout from the cup and handle could bring LC to new highs. With the MACD bound for a bullish crossover and the price slowly ascending above the 50, 100 and 200-day moving averages, a breakout is more likely to happen. Once the 1.82 all-time high or the cup and handle neckline is breached, we could get a minimum target price of PHP2.30. This I got by adding the size of the cup to the possible breakout point. However, there could be some selling pressure at the PHP2.00 psychological level. On the downside, PHP1.54 is the immediate support. If that breaks, the next support could be the 1-year uptrend.