Thursday, 10 March 2016

Sold my ABX Yesterday


Just sold one of  my 2 Barrick Gold (ABX) position yesterday. You may want to read the why and when I bought ABX in this post Analysis of Barrick Gold Price Chart if you haven't.

I still believe that this year is the start of bull market for gold. But after running so fast, the bull is tired and needs a rest. Everyone and everything does, gold bull is no exception.

I think everyone agrees with that. This bull run since mid Jan is stronger than most anticipated.

The only thing is, does the pause last for a few days or weeks, or longer before it resumes for a more sustained up move?

My view is, it's longer. In the next 3 to 6 months, gold prices will consolidate.

I don't feel like writing a post with in-depth detailed analysis at this time. I'll be very brief.

The following charts show 2 possible scenarios.

weekly chart of Barrick Gold ABX
Weekly chart of Barrick Gold, scenario #1
(click to enlarge)

weekly chart of Barrick Gold ABX
Weekly chart of Barrick Gold, scenario #2
(click to enlarge)

There's a scenario #3, not shown. This scenario is bearish medium to long term. In other words, ABX will plunge to new bottom that's below $6.

Well, obviously I don't believe all 3 scenarios will play out with equal chance. I think odd of scenario #1 playing out is the highest with scenario #2 slightly lower.

Of course, there's a scenario #4, which says that gold will continue to march upwards from here after a very brief pause. I think the odd of this is only as high as the very bearish scenario #3.

Of course, as soon as I smell the bull is up and running again, I'll chase it in a heart beat.



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