Stock Trading Predictions & Technical Analysis: $GOLD & ABX

Monday, November 9, 2009

$GOLD & ABX - Gold soon pulling back?

$GOLD - HOLD

As GOLD continues to move higher along with the market, I think we can expect a small pullback very soon. This should coincide with the Dow's pullback when it does occur, which I expect to be around 10300-10350. For GOLD if this up trending channel persists, it may go as high as 1150 (maybe close to 1200 but less likely) before pulling back possibly around 1060. As I announced on October 29th, in my ABX post for which I still hold my long position, we had a gold rush. In terms of ABX I'm up about 15%-20% in about 7 sessions only. But you could have taken a long position in practically any GOLD stock and you would probably have similar returns.

ABX - HOLD

In fact it appears today that most GOLD stocks are playing catch up, and that's why I think ABX today is up only 3% while most GOLD stocks are up about 5%. ABX and possibly other GOLD stocks is at its 52 week high and has support at $42.00. I think ABX may go a bit higher before pulling back, but I definitely wouldn't suggest to any one who missed this GOLD rush, to go long now, as you would be too late. The Stochastic for both GOLD and Gold stocks appear close to be giving us a SELL SIGNAL and is currently in overbought territory. As long as GOLD continues higher and obviously Gold stocks they are a HOLD. However, in the long term GOLD is a STRONG BUY. If ABX manages to stay above $42.00 tomorrow this should be its new support level, and what could happen is see ABX move higher to then pullback down at $42.00 to then bounce back up. Then you will have a BUY SIGNAL. The reason also I believe ABX could still move a little higher is because the RSI went over its last resistance point, and looks to be going towards overbought territory before we see a pullback. I think the pullback for GOLD stocks could very likely happen this week, but it should coincide with the direction of the Dow Jones. Please note that my analysis on ABX probably would be the same or very similar to any other Gold stocks. Like indicated on October 29th, when I took my long position in ABX you could have picked any Gold stocks, and I just happen to choose ABX which I felt has the most potential to outperform the rest.

ABX - LONG

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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.