Kaz Minerals - Pre-earnings technical analysis

Wednesday, 20th February 2019 14:12 - by Rajan Dhall

As the copper price has improved so has the share price of Kaz Minerals, I had the fortune of meeting the owners of this company and feel they have a strong robust business model but what lies in store for them as we head into earnings. 

On 24th Jan it was announced that the Co. completed the purchase of a Russian mine for USD 436mln. Chairman Oleg Novachuk stated it is 'one of the world's top ten undeveloped copper deposits' so I am looking forward to hearing any news on that front. Elsewhere in that report, the Co. reported copper production at the top end of its guidance range and partly attributed to a strong performance at its Aktogay mine in Kazakhstan. If that was the case back then and we have seen a 30% increase in share prices since, what can we expect from tomorrows final results?

Looking at the technicals on the daily timeframe and its correlation to copper has picked up the share price understandably. There was a good bullish breakout from the ascending wedge formation and if results are negative we could expect a test of the top of the trendline. However, price action today seems to be bearish, this could be traders hedging their books leading into the earning figures but the volume is not that high so it may not be too concerning. Either way, I will be looking at upside resistance levels here and I have posted some historical levels on the chart to be aware of. It would take something pretty special to hit 766p but that would take it into the old value area and longer term I believe it could be a good opportunity. However, as always trading final results can be a bit binary so keep your risk limitations tight. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.