Gold Fields Ltd.
I'll be the first to say that there are a lot of macro reasons to like gold. From the money presses paying for QE3 to the threats of the fiscal cliff, gold has a lot going for it this fall. But that's cold comfort to shareholders in Gold Fields Ltd. (GFI) right now.
Shares of the $9 billion South African gold miner have dropped more than 20% this year, dragged lower by production challenges and labor problems at the firm's mines. Now, with a descending triangle forming in shares, there's more potential downside in this stock. The descending triangle is formed by horizontal support under shares (in this case at $11.50) and downtrending resistance to the upside. As shares bounce in between those two key technical levels, they're getting squeezed closer and closer to a breakdown below support -- that's when it makes sense to be a seller.
So far this year, Gold Fields has been a poor proxy for gold -- and the setup in shares means that it's likely to continue to be one into 2013. Short sellers have a downside opportunity here on the breakdown below $11.50, and shareholders would be wise to go after an alternative mining name for Q4. If you bet against GFI, keep a tight stop.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV