Stock Trading Predictions & Technical Analysis: ABX (Gold Stocks)- Gold moving back up

Thursday, October 29, 2009

ABX (Gold Stocks)- Gold moving back up

ABX (Gold Stocks) - BUY SIGNAL

With the market bouncing back up, you can now expect gold to bounce back up too as it already did today. I took a long position with ABX at $36.27, with a stop loss at $33.75, and a stop buy order at $37.75. Almost all gold stocks are pretty much moving the same direction (EGO, AUY,GG...). Taking one gold stock over another should give you around the same returns, I chose ABX over AUY because I prefer stocks with a higher dollar value, making them somewhat safer. I decided to go long ABX because it bounced back up strongly over its 200 day MA, while this position also allowed me to set a stop loss order below the 200 day MA without taking on a loss of more than -7.00%, giving me more potential upside than downside. My stop buy order at $37.75 will be triggered if it goes back over its 50 day MA, which would give us another BUY SIGNAL.

Long ABX @ an average of $36.27 - Stop Buy @ $37.75 - Stop Loss @ $33.75

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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.