Yesterday Barrick Gold ($ABX) shares got hammered to the tune of -10.26% after reporting a disappointing quarter which included an EPS miss and weaker than expected production guidance:
ABX (Daily)
Perhaps the most interesting aspect of this large sell-off in ABX shares was that the stock closed below its lower 3-standard deviation Bollinger Band, something that has only happened 24 times since 1985:
The results are fairly mixed over the near term, however, an average 20-day return of 5.89% is nothing to sneeze at. Moreover, if the October 1987 Black Monday crash and April 2013 gold market crash are excluded then the results become astoundingly more bullish. Essentially if Barrick (and the rest of the gold mining sector) doesn't fall apart into a much deeper decline over the next several days the odds favor a solid bounce during the next few weeks.
Earlier today on the CEO.ca Index channel I posted the following comment:
The miners rallied towards the end of the trading session and the HUI (Gold Bugs Index) closed up .52% while printing a bullish 'hammer' reversal candlestick in the process. We will have to wait and see if today was simply a dead-cat bounce or tomorrow brings follow-through buying which could set up the 50% retracement rally I mentioned this morning.
To find out how @Goldfinger is trading gold mining shares/ETFs as well as other individual equities and precious metals in real time subscribe to the Trading Lab today!
DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.
