Gold bars
From the high of $14.62 in November 2007 (A), Kirkland Lake Gold Inc. sold off and settled into a bullish pattern known as an inverse head-and-shoulder formation (see solid lines). This pattern is characterized by a left and a right shoulder (between $7.50-$10) and a head near $3. The recent rise above the neckline of this pattern (see chart) created a breakout and signalled the start of a new up-leg. The current weakness should provide a good buying opportunity. Only a decline below $7.50 to $8 would cancel the potential upward move.
Point & Figure measurements provide a target of $14 (a 41-per-cent appreciation potential from current levels). The huge inverse head-and-shoulder formation supports higher targets.
Ron Meisels is a contributor to the www.NA-marketletter.com web site. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.
Source: www.decisionplus.ca