Kinross Gold Corp - KGC - close 16.64 change +0.01 stop 16.06

Company Description:
Kinross Gold Corporation is engaged in gold mining and related activities, including exploration and acquisition of gold-bearing properties, the extraction and processing of gold-containing ore, and reclamation of gold mining properties. Kinross' gold production and exploration activities are carried out principally in the United States, Brazil, Chile, Ecuador and the Russian Federation. Gold is produced in the form of dore, which is shipped to refineries for final processing. Kinross also produces and sells silver. It operates under 11 segments: Fort Knox, Round Mountain, Kettle River-Buckhorn, Kupol, Crixas, Maricunga, La Coipa and Porcupine Joint Venture. On January 7, 2009, Kinross completed its acquisition of 100% of Minera Santa Rosa SCM and 60% interest in Teck Cominco Limited. (source: company press release or website)

Target(s): 17.25, 17.75
Key Support Areas: 16.25
Key Resistance Areas: 17.25, 17.95
Time Frame: 1 to 2 weeks

Why We Like It:
KGC has been trading in a sideways channel between $16.25 and $19.25 for over 3 months. The stock is near the bottom of that channel and I believe the stock is ready to move higher in the coming days along with other gold miners. KGC is also testing the backside of its broken downtrend line from December. I believe KGC should easily trade up to its 50-day SMA which is also above our target of $17.75. I suggest readers initiate long positions if the stock trades down near $16.40. Our stop is below the recent channel at $16.05. This sets up more than a 3:1 risk/reward trade: we are risking $0.35 to make $1.35. Gold stocks tend to be volatile so please use proper position size to limit risk.

Suggested Position: Long KGC stock if it trades down near $16.40

Option Traders:
Suggested Position: Buy JUNE $16.00 CALL, current ask $1.27, estimated ask at entry $1.15

Annotated Chart:

Entry on May xx
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 7.2 million
Listed on 5/24/10, 2010