Buy Alert: February 4, 2016

| February 4, 2016

Buy Alert: February 4, 2016

 

Option Strategy:

Buy Barrick Gold $ABX July 15, 2016 $11.00 calls for $1.90 or better.

 

Commodity Outlook: Gold

Our precious metals focused trades are exploding right now…

In fact, $GLD soared past our first profit target at $110.00 this morning. Be sure to collect the appropriate amount of profits according to your risk profile in this trade today!

With gold and gold miners in rally mode, investors are quickly realizing that the Fed will likely be forced to abandon its plan to further raise interest rates this year.

Incoming economic data is just too bad to do so!

That’s why we’re adding another gold focused position in today’s trade alert.  It’s in a deeply oversold miner that’s breaking through important levels of long-term technical resistance!

 

Resource Trade: Barrick Gold $ABX

The world’s largest gold miner by market capitalization has had a rough go of it the past few years.  Thanks to crashing gold prices and the financial pressure that came with it, $ABX sank from $45 a share in 2012 to $6 in September 2015.

But the past few weeks has brought a massive change of fortune for $ABX.  Shares have exploded to $11 in recent trading as investors realize just how troubled the US economy is right now.

Here’s the real key…

As you’ll see in the chart below, $ABX is rallying above an extremely important technical resistance trend line.  With this area of price resistance out of the way, $ABX is finally breaking free of the bearish shackles that have kept it under wraps for so long!

So here’s what we’ll do…

Buy the $ABX July 15, 2016 $11.00 calls for $1.90 or better.

The current bid/ask spread for this contract is $1.74/$1.80.

Do not pay more than $1.90!

Our official entry price for performance tracking is $1.80.  Your price may be higher or lower.

Exit Strategy:

Barrick Gold

As you can see, $ABX recently broke above the resistance trend line (blue line) from the 2012 highs.  This break is significant because it changes the technical momentum from bearish to bullish.

Remember, we want $ABX to trade higher.  Our first profit target is $15.00 while our second target is at $20.00. 

Our risk control line is at $8.50.  If $ABX trades below that level, conservative investors should consider closing this trade to preserve capital.

 

Category: Commodity Trading

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