RSS Galvan Chartbreaker - RANDGOLD RECOVERY PLAY (5,340p)
By Ed Woolfitt | 11 April 2011, 12:12 BST
Ed Woolfitt, Head of Trading at Galvan
Since the end of March shares in West Africa focused miner Randgold Resources have bounced on news that Republican Forces in Ivory Coast, loyal to President-elect Alassane Quattar, are rapidly advancing, following the contested election outcome. This should calm those in the market who currently believe that the group won't meet its production targets, while the annual report further underlines how the company has been able to grow the volume of reserves and at the same time improved it's performance, during a "challenging phase".
With political tensions in its key Ivory Coast centre of operations centre more than factored into the share price, (down 20% in the middle of the crisis), and the seemingly inexorable rise in the price of Gold since the troubles began, Galvan Resources now views Randgold Resources as a very promising recovery play.
The Randgold Resources chart shows that the shares have rebounded sharply via an island bottom reversal formation through March / April. The view now is that while there is no end of day close back below the 10-day moving average at 5,090p, the upside for the stock should be the 200-day moving average at 5,615p.
| Dream Scenario | Improvement in the Ivory Coast political situation pulls Randgold shares back round to resume the post 2010 uptrend. | Stock | Randgold Resources |
| Nightmare Scenario | Investors remain concerned by adverse geopolitical developments. | Epic Code | RRS |
| Price Target | 5,615p | Year High | 6,655p |
| Stop Loss | 5,090p | Year Low | 4,250p |
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Source: Galvan Research and Trading
