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
Comments
gatorNic
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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
timwest
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Exactly gantorNic - thanks for explaining
HamedAghajani
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Have you covered your profit here? or you are still in this trade?
gatorNic
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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
HamedAghajani
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Thanks.
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.
A-shot
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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
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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.
HamedAghajani
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Thanks GatorNic,
HamedAghajani
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Would you please clarify, what do you mean -100? If a buy order at 1600, with SL at 1500 is too risky?
timwest
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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