After rallying almost 25% from $33.67 to $42, Agnico Eagle encountered some resistance. Now however the resistance at $42 appears to have been broken and as the chart below shows AEM could go to $44 perhaps even to its all time high of $45.52.

If this is to happen, it is likely that it will either happen in the next few trading sessions, or after a correction and a period of consolidation. AEM may surge to $44/$45 near term and then pull back to the $42 level and use what was a resistance as a support line.

Ideally we would like to see AEM hold above the $42.00 level and use this as a base to consolidate its recent dramatic gains. It should be noted that technical indicators are signalling a pullback, with the RSI at over 75 and the STO also looking bearish. However when Agnico Eagle surged to its all time high of $45.52, the STO was literally off the charts. Perhaps AEM will defy its STO again and power on upwards, but it should also be noted that whilst the STO may have been off the charts the RSI was not so dramatically overbought.

But now this level of $42.00 is behind us, we can look forward to watching the Eagle soar in months to come, even if we have to endure a small pullback in the short term. We are keeping Agnico Eagle as a BUY in our gold prices portfolio of gold stocks and the company trades on the TSX and NYSE under the symbol AEM.