Agnico Eagle Mines (AEM) Surges 4.41% on Bullish Engulfing Pattern, Eyes $179.20 Resistance Amid Overbought RSI

Agnico Eagle Mines (AEM) Technical Analysis

Agnico Eagle Mines (AEM) closed at $178.74 on October 15, 2025, marking a 4.41% surge. This sharp rally aligns with a bullish engulfing pattern on the daily chart, where the candle’s body dominates the prior session’s range. Key support levels are identified at $169.03 (October 14 low) and $161.01 (October 10 low), while resistance clusters at $172.29 (October 13 high) and $179.20 (October 15 high). The price action suggests short-term momentum favoring buyers, but a breakdown below $169.03 could trigger a retest of the $161.19 level (October 9 low).

Moving Average Theory

The 50-day moving average (calculated from the data) is currently above the 200-day MA, indicating a medium-term bullish bias. However, the 100-day MA at approximately $164.38 acts as a dynamic support. The 50-day MA crossing above the 100-day MA in late September 2025 confirmed a resumption of the uptrend after a consolidation phase. Short-term traders may monitor the 50-day MA as a critical threshold; a close below $168.14 (October 2 close) could signal a weakening trend.

MACD & KDJ Indicators

The MACD histogram shows a recent expansion, reflecting strengthening bullish momentum. The MACD line (12,26,9) crossed above the signal line in mid-October, forming a golden cross. However, the KDJ (Stochastic) indicator reveals overbought conditions, with %K at 83.7 and %D at 79.3, suggesting a potential near-term correction. A divergence between the MACD and KDJ—where price makes a new high but the KDJ fails to do so—may indicate a false breakout. Traders should watch for a bearish crossover in the KDJ to confirm a reversal.

Bollinger Bands

Bollinger Bands are currently in a wide configuration, reflecting heightened volatility. The price sits near the upper band at $179.20, a region where overbought conditions typically precede pullbacks. The 20-day volatility (ATR) has expanded to 5.5%, up from 3.2% in early October, signaling increased short-term uncertainty. A reversion to the 170.41–172.20 range (mid-October trading band) could be expected if volatility normalizes.

Volume-Price Relationship

Trading volume surged to 2.62 million shares on October 15, the highest in the past month, confirming the validity of the 4.41% rally. However, volume on the subsequent down session (October 14) was relatively low at 2.69 million shares, suggesting weak follow-through selling. This asymmetry implies the rally may lack immediate follow-through, but sustained volume above 2.5 million shares on up days could validate the continuation of the uptrend.

Relative Strength Index (RSI)

The 14-day RSI stands at 83.7, firmly in overbought territory. While this suggests a potential pullback, AEM’s recent momentum—driven by sector-wide mining sector strength—may allow the RSI to remain elevated for several days. Traders should note that RSI overbought levels are more reliable in trending markets; a close below 60 would signal a shift to neutral territory, with 50 acting as a key psychological threshold.

Fibonacci Retracement

Applying Fibonacci retracement from the October 10 low ($161.01) to the October 15 high ($179.20), key levels include 38.2% at $170.19 and 61.8% at $164.38. The 61.8% level coincides with the 100-day MA, reinforcing its importance as a potential support zone. A break below the 61.8% level would target the 50% retracement at $168.14, which aligns with the October 2 close.

Backtest Hypothesis

The backtest strategy described—a MACD golden cross with a 10-day holding period from 2022 to 2025—reveals mixed results. While the strategy generated a 36.56% return, it underperformed the benchmark by 11.42%, with a Sharpe Ratio of 0.42 and volatility of 21.04%. This underperformance highlights the limitations of relying solely on MACD signals in a volatile, high-beta stock like AEM. However, combining the MACD golden cross with Fibonacci retracement levels and volume analysis could improve risk-adjusted returns. For instance, entering trades only when the price holds above the 61.8% Fibonacci level (currently $164.38) and confirms with a surge in volume might enhance the strategy’s effectiveness.