Potential Long Opportunity in a Gold Stock

03/20/2009 9:59 am EST


Barrick Gold Corp. (ABX) - This acquirer, explorer, and developer of gold properties and copper, silver, and zinc has pulled back from a recent high at over $40, but fell through support at the conjunction of the 50- and 200-day moving averages.

Now, however, with inflation as a real possibility, ABX has responded with a buy signal from our internal indicator, the Collins-Bollinger Reversal (CBR), and the stochastic.

But to get a full new bull market move underway, it must break above the 50- and 200-day moving averages at $34. Buying now could yield a target of $50, but stop-loss orders should be placed at $25.

By Sam Collins of OptionsZone.com

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