Trade Idea: GOLD
I am currently NEUTRAL (but leaning BULLISH) on $Barrick Gold Corp(GOLD)$.
Here's a look at their daily chart:
As you can see, the stock is currently trading in a rising wedge formation, which is preceded by a move down and which is characterised by higher highs and higher lows that eventually converge and leads to a breakdown. As if yesterday, the stock briefly dropped below the rising wedge signifying a possible breakdown but found its way back into the wedge by the end of the day as the market continued to sell off across the day.
On a fundamental note, investors have been flocking back towards risk-off assets (i.e. bonds, gold, silver etc.) as the Fed has suggested that the economy is headed for a recession and a target Fed Funds Rate of 5 - 5.25%. This is a bullish headwind for gold miners going into next year, as the market is projected to head lower to between 3,000 - 3,300 as projected by analysts such as Mike Wilson, who has been largely accurate during the bear market.
The stock is currently trading above the Middle Bollinger Band with a healthy RSI (between 30 and 70). The RSI is turning up suggesting that GOLD bulls are starting to get back in control of the stock. Moreover, the stock previously wicked off the 200EMA at around 17.40 before pulling back, and it might seek to retest that level or higher in the coming days. However, we should not rule out the possibility that the stock might try and break below the wedge again in the subsequent trading sessions. Therefore, I would take CALLS if it holds the rising wedge and PUTS if it breaks below the rising wedge setup. That being said, I am slightly in favour of upside here as it has room to head higher to possibly retest the 200EMA or to test the 200DMA in the 18s, before it gets a sustained pullback. Good luck everyone!
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@TigerWire @TigerStars $SPDR Gold Shares(GLD)$ $Gold - Dec 2022(GC2212)$ $SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ Trust(QQQ)$
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