The Eagle has soared in recent trading, rising from $33.67 to $41.67 - an eight dollar gain or an increase of 23.7% for Agnico shareholders.

However, the rally has stalled at around the $42 mark as Agnico Eagle battles against some technical resistance.

It may be the case that after such a sharp rise in the stock price, we could see some profit taking, dampening the stock down a little. However it is still significantly out of its downtrend and with a small drop and consolidation we would see a new uptrend forming, rather than a continuation of a spike.

Technical indicators such as the RSI and STO are looking overbought and on the STO shown on the chart above, the black line has crossed down through the red, signalling a short term drop in stock prices may be around the corner.

However, it may be a week or so away, but the 50dma looks like its going to attempt to break up through the 200dma which would be a very positive sign for Agnico Eagle. Until then be prepared for a short term decline in the stock price as the new uptrend begins to form and we can then watch to see if Agnico Eagle can break up through its resistance at $42.00. We see a large rally in gold and gold stocks coming at the end of the summer.

Agnico Eagle trades on the NYSE as AEM and on the TSX under the same symbol.