There has been a reprieve for the Centamin share price longs. This is due to the bounce on the 85.20 support by the 1 September candle, confirming the completion of the topping pattern’s breakdown move. This has been followed by a 2.36% uptick this Friday. However, the uptick has met a wall at the 88.40p immediate resistance.
The uptick in the Centamin share price follows days of downside movement, as gold price tanked on prospects of an aggressive rate hike by the US Federal Reserve. This outlook came into play after last week’s remarks by the Fed Chair at the Jackson Hole Symposium and got a boost from upbeat US fundamentals earlier in the week.
However, the downbeat private sector job report on Wednesday (ADP Employment Change) and Friday’s dismal Non-Farm Payrolls report has created new demand for gold, which is also pulling up the stocks of gold miners.
Analysts at Liberum have raised their upside case for Centamin share price targets after they projected that the UK-based gold miner was in an excellent position to benefit from savings from its in-house mining, solar generation and grid electricity projects.
This improved outlook comes despite concerns of erosion of some of these savings by inflation. Liberum reaffirmed the BUY recommendation and raised their upside case price target from 102p to 121p. Considering today’s closing price so far (85.22), this new target gives Centamin’s share price a 29.57% upside potential.
The intraday bounce from the 85.30 support level met resistance at the 88.40 price mark, the site of previous highs seen on 11/25 May 2022. This bounce coincides with the completion point of the measured move from the topping pattern, whose peak lies at 95.14.
This peak will become the new bullish target if the pattern’s neckline at 89.76 is broken. A continued advance sees the bulls having clear skies to aim for 99.90 (25 February, 16 March and 19 April tops). The bulls can expect 103.28 (7 March low) to become another harvest point if the bullish advance persists.
However, the bullish outlook is invalidated if the bears resist attempts to cross beyond 88.40. A pullback from this return move retests the support level at 85.30 (4 August and 1 September low). If the bulls fail to defend this pivot, a push downward that aims for 80.70 (13 May low and 15 July highs) will be on the cards. The 16 June low at 76.92 and the 15 July low at 74.38 are additional downside targets if the downside move persists.
This post was last modified on %s = human-readable time difference 17:02