ABX daily Feb 12th

ABX daily Feb 12th

ABX (Barrick Gold Corp) offters an objective entry or add-on to a long-term position on this pullback to backfill the big Jan 16th gap. Upside target(s) TBD but will most likely be at or above the former T2 level. Suggested stop for a swing/trend position below 11.20.

Barrick Gold is one of many examples of using technical analysis to not only determine when to buy a stock (the easy part for most traders/investors) but more importantly, when to take profits (the hard part).  ABX was most recently added directly as an Active Long Trade on Jan 16th and went on to hit the final target (T2 at 13.21) just 3 trading sessions later for an 11.9% gain. As is often the case, the stock immediately reversed upon reaching the final target, falling about 10% since then and has now pulled back to make a complete backfill of the large Jan 16th gap.

Tops and bottoms of gaps often act as solid support & resistance levels and when factored in with yesterday’s post making a case for a likely reversal/bounce in gold & the mining stocks, a solid case can be made that ABX offers an objective long entry here, either for active traders just looking for a quick bounce off the initial tag of support as well as longer-term traders & investors looking to re-position back into ABX or add to an existing position.

Also keep in mind that with Barrick Gold being one of the largest component of GDX, one could also use that more diversified ETF in lieu of trading Barrick or any other individual mining stock(s). NUGT (3x long gold miners) is another option for very active traders only looking to play a quick bounce lasting hours or days.

click here to view the live, annotated chart of ABX