FM Wealth Management News Letter
For years analysts have given Barrick Gold (NYSE:ABX). downgrade
after downgrade. As stalwart in the miners’ complex keep looking lower
and lower, with some even looking at the possibility that it may even go
out of business due to its debt load.
However, it was one of the first miners to bottom, back in 2015. In fact, when we saw the a potential bottom of Barrick forming in 2015, when we started out FM Wealth Management Miners Portfolio in September of 2015, ABX was our first buy.
Since it hit a high over 18 months ago, it has been within a corrective pullback from the August 2016 high where we have seen sentiment about the company drop consistently.
In the fourth quarter of 2017, when the VanEck Vectors Gold Miners ETF (GDX) broke its high support in September, We noted that the ABX had all the signs to take it down to the 11 to 12 range even though it was trading in the 16 to17 range at the time. And, if you note the “buy in zone” on the chart below, it was placed there in September of 2017.
ABX has now hit our downside target but we see no signs yet that this slide is complete. We are now just below the resistance level that we were looking for it to hit its in the 12.49 area. ABX has a set up to drop towards the $10.90 to $11 range to complete this long-term pullback in which it has been mired since mid-2016, as long as ABX remains below this resistance,.
Alternatively if we see start to see strength come in and push through the 12.50 region, and it can continue to rally up towards the $13.80 to $14 range in the next few weeks, and that would provides us with a strong indication that the lows for Barrick have been seen, and we are likely setting up the
next major bullish move in the price of the stock for the rest of 2018.
All that said we believe under either circumstance, we expect the ABX to hit a significant bottom in the near term, and see it rally until the end of the year.
So what that means to investors and what you should take away from all of this is that since ABX has been an anchor on the GDX (given of course its weight in the ETF) of late, we believe that the GDX will finally begin rally once ABX finds a bottom and is no longer a drag on the GDX.
However, it was one of the first miners to bottom, back in 2015. In fact, when we saw the a potential bottom of Barrick forming in 2015, when we started out FM Wealth Management Miners Portfolio in September of 2015, ABX was our first buy.
Since it hit a high over 18 months ago, it has been within a corrective pullback from the August 2016 high where we have seen sentiment about the company drop consistently.
In the fourth quarter of 2017, when the VanEck Vectors Gold Miners ETF (GDX) broke its high support in September, We noted that the ABX had all the signs to take it down to the 11 to 12 range even though it was trading in the 16 to17 range at the time. And, if you note the “buy in zone” on the chart below, it was placed there in September of 2017.
ABX has now hit our downside target but we see no signs yet that this slide is complete. We are now just below the resistance level that we were looking for it to hit its in the 12.49 area. ABX has a set up to drop towards the $10.90 to $11 range to complete this long-term pullback in which it has been mired since mid-2016, as long as ABX remains below this resistance,.
Alternatively if we see start to see strength come in and push through the 12.50 region, and it can continue to rally up towards the $13.80 to $14 range in the next few weeks, and that would provides us with a strong indication that the lows for Barrick have been seen, and we are likely setting up the
next major bullish move in the price of the stock for the rest of 2018.
All that said we believe under either circumstance, we expect the ABX to hit a significant bottom in the near term, and see it rally until the end of the year.
So what that means to investors and what you should take away from all of this is that since ABX has been an anchor on the GDX (given of course its weight in the ETF) of late, we believe that the GDX will finally begin rally once ABX finds a bottom and is no longer a drag on the GDX.
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