Are Polymetal International PLC Charts Signaling End of a Bearish Trend?

Summary

  • Polymetal International PLC (LON: POLY) recovered from the lower levels and delivered ~15.23 percent returns in the last one month.
  • POLY prices are trading in a falling channel formation on the daily chart and trading above an upward sloping trend line on the weekly chart.
  • The stock prices are approaching the major resistance zone around the downward trendline coupled with the Parabolic SAR indicator that may act as a major hurdle for the short-term.

Polymetal International Plc (LON: POLY) prices have bounced from the low of GBX 1,382 made on 30 March 2021 to the recent high of GBX 1,592.50 tested on 19 April 2021, a gain of ~15.23 percent. On Wednesday, the stock prices closed at GBX 1,578 level, up by 1.48%, and was one of the top gainers in the FTSE 100 index. The stock outperformed some of its peers, such as Fresnillo PLC (LON: FRES) up 0.37 %, and Hochschild Mining PLC (LON: HOC) down 3.21%.

Polymetal International PLC on daily chart

Source: Refinitiv, Thomson Reuters; Analysis: Kalkine Group

The prices have been moving in a descending channel formation for the past eight months sustaining above the lower band of the channel. The stock has broken out of its horizontal trendline (black color horizontal line in the above chart) at GBX 1,525.90 level on 15 April 2021 and post that made a two-month high. The prices are trading above the horizontal trendline (blue color horizontal line in the above chart).

Besides, the price is trading above its 50-period SMA, acting as a crucial support zone below the horizontal trendline. The momentum oscillator RSI (14-period) is trading at ~67 levels, indicating a positive trend for the stock. MACD (Moving Average Convergence Divergence) is also showing a positive crossover and moving above the centerline further indicates strength for the stock. The Parabolic SAR indicator is trading above the current market prices and acting as short-term support for the stock at the lower end.

Polymetal International PLC on the weekly chart

Source: Refinitiv, Thomson Reuters; Analysis: Kalkine Group

The stock prices are trading above an upward sloping trendline support level of GBX 1,369 (black color line in the above chart) and continuously taking support of the same. In the past, the bulls faced a strong resistance of a downward sloping trendline at GBX 1,857 level on the weekly chart and currently, the price is again approaching the downward sloping trendline resistance zone.

The momentum oscillator RSI (14-period) is trading at ~49.95 levels. Further, the stock price is trading below its 50-period (SMA), which is acting as a crucial resistance zone near the falling trendline. The trend-following indicator Parabolic SAR is above the current market price and posing as a major resistance at GBX 1,652 level.

Polymetal International Plc price seems to be in a recovery phase, as represented by the above chart analysis and technical outlook. Currently, the share prices are holding the key support zone. The chart pattern suggests that there might be more action expected in POLY if the price remains above the support levels. If the prices break the crucial resistance level in the coming weeks, the bulls may extend the rally.

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