Trade of the Day: Chart Predicts GG Stock Will Keep on Shining

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Goldcorp Inc. (USA) (NYSE:GG) — GG stock jumped 2.9% on Friday and is up nearly 12% since the Brexit vote, as investors flocked to the safety of gold-related stocks.

The gains were just the latest in what has been a banner year so far for the yellow metal and miners. The Wall Street Journal reports gold had its best two quarters since 2007, up 24% in the first half of the year. And the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX) has more than doubled year to date.

I see more gains ahead for GG stock, which boasts solid fundamentals and technicals.

On June 15, S&P Capital IQ Equity Research initiated coverage on GG stock with a “Buy” rating and 12-month target of $20. Its analysts noted that Goldcorp has a stronger balance sheet and less geopolitical risk than many of its peers. They also said margins and free cash flow should improve as the company lowers production costs by improving infrastructure and focusing on its core mines.

Analysts expect Goldcorp to turn a profit of 34 cents per share this year, after reporting a loss of 11 cents last year. And they project earnings of 49 cents in 2017.

Turning to the chart, GG stock broke through a bearish resistance line at about $12 in early February and then established a bull channel. That channel is intact with support near $18, which is also the 50-day moving average, and resistance at about $20.

On Friday, GG stock broke from a triple-top at $19. This breakout was supported by high accumulation for the past two weeks and confirmed by a positive MACD.

Traders should buy GG stock at $19.50 with a target of $23 for a potential return of 18%. Goldcorp also pays a small annual dividend of 8 cents per share for a forward yield of 0.4%.

GG Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2016/07/goldcorp-inc-usa-gg-stock-trade-day/.

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