Barrick Gold Corp. ($ABX) has traded sideways after topping out at major resistance at $47.25 in June. After a recent decline from resistance, $ABX could be ready for another round of weakness – and I’ve got three reasons why!
1. Bearish Moving Average Crossover
The last multiple moving average crossover occurred in April, which led to a bullish advance from $39.65 to resistance at $47.25. However, a bearish crossover has now occurred in $ABX, which means we could see a period of weakness ahead.
2. PEMA Pull-Back Signal
Not only has a bearish crossover occurred, but price has also begun to show signs of a bearish PEMA Pull-Back signal, whereby price tests the moving averages from beneath before heading lower.
The first test after a bearish crossover signal can usually lead to a new low within the current trend.
To confirm this signal, we must see a close price that occurs below yesterday’s low of $42. But you mavericks can jump in earlier.
3. Bearish Wick Reversal Signal
The fact that price has also formed a bearish wick reversal signal (or Shooting Star) confirms weakness in this stock. Each of the bearish wick reversal signals that have fired in the last three months have led to 3 to 4 day declines in this issue. Therefore, we could see a nice swing short opportunity ahead.
As far as I can see, price can drop to anywhere from $40 to $38.50. The $38.50 level is a monthly double pivot hot zone and would also represent a measured move.
Let’s see how this one plays out!
By the way, the PEMA Pull-Back and the PEMA Crossover signals that I wrote about above are included in my FREE eBook Profiting with Pivot-Based Moving Averages. If you haven’t already done so, Check it Out! It’s FREE, and I’ll never share your information.
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Cheers!
Frank Ochoa
PivotBoss.com
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