Impala Platinum Shares Poised to Fall, Technical Indicators Show

Shares in Impala Platinum Holdings Ltd., the world’s second-largest producer of the precious metal, may be poised to drop in Johannesburg trading, technical indicators used by some analysts show.

Impala’s stock has more than doubled this year, gaining the most among members of the FTSE/JSE Africa Platinum Mining Index after Lonmin Plc. The share is near a so-called death cross, which occurs when the 50-day moving average prices falls below the 100-day moving average. It’s an indicator to some analysts of further declines.

Impala rose as much as 9.5 percent on Thursday, advancing for a fourth day, and was 7.5 percent higher at 60.85 rand by 1:03 p.m., set for the highest close in almost 14 months. About 3.4 million shares have been traded, almost matching the average for the past three months. The spot price of platinum, used in jewelry and in catalytic converters that reduce harmful emissions from cars, gained 0.9 percent to $1,146.35 per ounce.

The company’s stock has climbed above the 70 level on the relative strength index, a sign for some analysts that a security has risen too quickly and may be poised to drop. 

Lonmin was 6.2 percent higher, with an RSI reading of 57. Anglo American Platinum Ltd., the largest producer of the metal, gained 3.2 percent, with an RSI of 67.

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