Barrick Gold Corp ABX Daily - Oversold and dirt cheap

469 19 10
ABX             dual-entry system:

It is plain cheap with $1.81 in trailing earnings against a $16.45 stock price, which is 11% earnings yield.

The stock is oversold and very cheap compared to "the market". See text in the chart.

Using the 21-day CCI ( Commodity Channel Index ), it is safer to wait for this to rise to -100 to enter, as noted on the chart on the previous 7 instances.

Tim 2:12PM EST May 19, 2014 Now ABX             is up to $16.52 last
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@Hamed - no he means the current CCI is at -221. So for less risk on the trade wait for a recovery to -100 on the CCI
+2 Reply
timwest gatorNic
Exactly gantorNic - thanks for explaining
Have you covered your profit here? or you are still in this trade?
gatorNic HamedAghajani
So far so good, I ended up picking some up after it crossed the -100 CCI. I banked some at 5%, as I always do and so far letting the rest run. I would be interested too on Tim's thoughts on where it goes from here? Currently daily CCI is well into overbought at 210
I entered at 15.99 and moved my SL to 17.45, ready to re-enter the market if i get stopped out, if there is any upside momentum. Would be great if Tim share his thoughts on this one.
2use HamedAghajani
So far it is according to plan. CCI needs to turn down a bit, price down a bit as well, then it may get higher on a shorter move from CCI. See a similar trend from 2014-01-07
timwest HamedAghajani
The gold stocks, silver and gold have had a very nice run up. I am taking some money off the table, Thursday and Friday, and will be watching closely after this strong ramp-up for taking more off the table. Thanks for the question. I'll post a chart with levels, etc.
Thanks GatorNic,
Would you please clarify, what do you mean -100? If a buy order at 1600, with SL at 1500 is too risky?
+1 Reply
timwest HamedAghajani
HamedAghajani, If you'd like to wait for a dip to 16.00, you are certainly welcome. Risking a drop to 15.00 is a fine amount of risk for the trade as well. The 11-day ATR is 0.33. Therefore, 3 x the 0.33 gives you a stop of $0.99 down from your entry price. I'd suggest half entry here and half entry when CCI rises to -100 on the 21-day calculation. All the best, Tim
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