ABX (Barrick Gold Corp) has hit the first profit target, T1 at 12.45, for a gain of 5.1% (if taken at the second entry/price posted on Friday following the whipsaw buy signal) or 8.3% (if taken earlier on the whipsaw/false break above 11.48). Consider booking partial or full profits and/or raising stops, according to your trading plan. T2 (13.21) remains the final target at this time but as per the update on the PMs & miners earlier today, the odds of a near-term pullback in the mining sector is somewhat elevated at this time.
Gold, silver & the mining sector have all reached what I'd consider a minor resistance level and with many of the mining stocks quite extended, I've decided to temporarily reduce exposure to the sector via booking profits on several of my longer-term holdings, including the ABX (Barrick Gold Corp) Active Long Trade which has now hit the first profit target today (update to follow).
I continue to remain longer-term bullish on gold, silver & the mining sector and plan to recycle back into most or all of my mining positions soon, even if the sector moves quite a bit higher before pulling back. Longer-term traders & investors need not be overly concerned with trying to game all the shorter-term zigs and zags of the precious metal & related mining stocks but as an active trader, I will often attempt to sell the rips & buy the dips, even with longer-term swing trades & investments.
As the yellow arrows on the GDX daily chart below indicate, at this time I am looking for a pullback to around the 22 area (about 1 point or 4.5%) before adding back exposure to GDX and select individual mining stocks. Should GDX continue considerably higher before pulling back, I will update my thoughts/trading plan as we go.
SLV (Silver ETF) has hit T1 hit for a 5% gain. Consider booking partial or full profits and/or raising stops, depending on your trading plan. Reactions (i.e.- pullbacks and/or consolidations) are likely as each target level is hit although I favor at least T2 on SLV and may likely add some additional, longer-term targets as the case for a lasting bottom in both silver & gold have recently strengthened considerably with the breakout of the downtrend as well as the inverse head & shoulders pattern in gold. Couple the recent bullish price action in gold & silver (and the miners) with the fact that the dollar continues to soar to new multi-year highs and that gives us the potential for a very strong rally in the metals & miners if & when the dollar finally begins even just a half-decent pullback.
ABX (Barrick Gold Corp) was posted as a Long Trade Setup on Jan 7th with an entry to be triggered on a break above 11.48. Although I usually place price alerts on the trade ideas that I am tracking (and this was/is one of my favorites), I never set a price alert on ABX. On Tuesday, ABX popped just a single tick above 11.48 to print a high of 11.49 that day, thereby technically triggering the entry that was previously stated. The stock immediately reversed, exceeding the suggested stop and so technically, ABX was stopped out for a relatively small loss (3%) the same day the entry was triggered.
I still very much like the pattern despite the whipsaw signal earlier this week. As such ABX will be added as a new Active Long Trade with the same price targets as before. Those who did take the trade on Tuesday and gave it some more room (as I had suggested an unusually tight stop due to my concerns about a pullback in the miners at the time) might consider raising stops at this point.
I've spent some time away from my desk over the last couple of day but just wanted to point out that gold ($GOLD/GLD) has clearly and impulsively broken above the Inverse Head & Shoulders pattern that I've been highlighting since Dec 12th (see the $GOLD spot gold chart link on the sidebar of the homepage). Keep in mind that $GOLD is an end-of-day chart. Therefore, best to view gold futures or GLD during regular trading hours when trading gold or using it to confirm trades in the mining stocks.
As these 60 minute charts on UCO & CL (crude oil futures) indicate, crude has pulled back to support following the recent breakout and thereby offers an objective new long entry or add-on to an existing position (of CL, USO, UCO, OIL, etc...). The potential price targets for UCO remain the same however, stops should be dependent on one's average cost.
SLB (Schlumberger Ltd) was mentioned as one of several potential bounce/swing trade candidates on Tuesday (Jan 13th). Bounce targets below are the actual resistance levels, consider sell limit orders slightly below your preferred target. Stops dependent on one's average entry price.
SFY (Swift Energy Co.) was mentioned yesterday as one of several bounce/potential long-term swing trade candidates in the Peak Oil vs. Oil Glut post. As with most of those trade ideas (additional charts/notes on the remainder to follow tomorrow), SFY is in the process of forming some potentially strong bullish divergences on the daily time frame. As crude prices have yet to show any convincing signs of a bottom on the daily or weekly time frames (although bullish price action was pointed out on the 60 minute time frames earlier), I am currently viewing SFY and the other energy sector trade ideas mentioned yesterday as short-term oversold bounce trade ideas. However, the potential does exist for these trade to morph into much longer-term swing trades/investments, once again, largely dependent on how crude oil trades going forward.
The next objective entry or add-on for those who established a starter position yesterday would be on a break above the downtrend line on this 60-minute chart. My price targets are the horizontal resistance levels at 2.61 & 2.96 (with the actually sell limits to be set a few cents below those levels). Stops dependent on one's average cost/entry price. 60 minute, daily & weekly charts above.