Stock Trading Predictions & Technical Analysis: ABX

Wednesday, December 9, 2009

ABX - Hammer Bottom Pattern

ABX - BUY SIGNAL

After seeing a strong pull back in GOLD and GOLD Stocks, the major up trend looks to resume. We have seen today among several GOLD stocks signs of a bottom within their current minor down trends. Today ABX has given us a Hammer bottom pattern. This bottom pattern has occurred after a strong bounce back up over its 50 day MA around $40.43. A move higher tomorrow over $42 would confirm the bottom at which time the ~$42.00 level could become the closest support level. Also, if this occurs ABX could go as high as $45.50 where the next resistance level stands and a move higher than that could send it back towards $48.00 and a STRONG BUY SIGNAL would be triggered with a new 52 week high. I have taken a long position in ABX today as I managed to enter near the 50 day MA while seeing the Hammer bottom pattern occur. A strong move below the 50 day MA would give us a STRONG SELL SIGNAL, but based on yesterday's and today's move ABX looks more likely to be heading back up, and taking a long position at current levels is relatively safe, the fact that ABX is so close to its 50 day MA and -7% to -8% stop loss order is very unlikely of being triggered. Basically I see a lot more potential of seeing ABX move higher from here than downwards with a lot of potential of providing a very decent return if the stock actually does start moving higher again. I have also set a BUY STOP order over $42.00 to double my current position.

LONG ABX

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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.