Sunday, July 25, 2010

Barrick Gold - Question of "When?"

Barrick Gold is the world's top gold producer. They are simply the best:

  • #1 gold reserves
  • #1 gold producer - and finally unhedged
  • tremendous project pipeline
  • provides global diversification in geopolitically stable regions
  • strong balance sheet
  • strong management
  • etc, etc, etc
Gold is currently in a correction, and this presents an opportunity to "invest" in Barrick Gold. "Invest" is intentionally quoted, because don't consider this a trade. This is both a value and growth investment opportunity. The charts are indicating the downtrend to continue, but what's interesting is that the Gold miners earnings are coming out this week. Barrick reports on Thursday. Early in the week may be a buy opportunity.

Gold Correction - Chart Updates

  • The trend is still down and is confirmed by the weekly MACD-Histogram and RSI indicators

On the daily charts, the down trend appears to be easing, but the trend is still down. Look for a bullish divergence in the weekly charts for a buy opportunity

Sunday, July 18, 2010

Gold Bearish Divergence Point to Correction

Weekly Chart

  • Class A bearish divergence in weekly MACD and RSI

Daily Charts
  • Indicators on daily charts confirm internal weakness and downward price trend

  • MACD(50,200,1) slope is negative
    • Note the bearish divergence

  • momentum indicators are confirming downtrend

  • volume indicators are also bearish

  • NOTE: The ADX line is moving up and has crossed over the lower line
    • this usually indicates a strong trend move is about to start
It appears that the long awaited Gold correction has begun which coincides with a wave 5 completion. The retracement target is into the wave 4 formation, which aligns quite nicely with the Fibonacci retracement levels - see the weekly chart above. 

Recommended Strategy: wait for a bullish divergence on the weekly chart before going long.