Gold mining stocks Barrick Gold (ABX) , Yamana Gold (AUY) , Goldcorp (GG) and Newmont Mining (NEM) were out of favor for several years, but that began to change in the second half of 2015. In the first three days of 2016, their gains outshined the market, arguing for their place as at least a 10% allocation in a diversified portfolios.
It's called a flight to safety.
With the S&P 500
Let's take a look at the weekly charts. A positive weekly chart occurs when the weekly close for a market or stock is above its key weekly moving average, with weekly sentiment rising above the overbought threshold of 20.00. The charts show the key weekly moving average in red and the 200-week simple moving average in green. The weekly momentum reading is shown in red in the study at the bottom of the chart.
Here's the weekly chart for Barrick Gold.
Courtesy of MetaStock Xenith
The weekly chart for Barrick Gold shifts to neutral from negative given a close on Friday, Jan. 8 above its key weekly moving average of $7.59. The weekly momentum reading is projected to slip to 60.64 this week, down from 61.52 on Dec. 31. Given a flight-to-safety rally, the upside potential is to the 200-week simple moving average of $20.58.
The stock closed Wednesday at $7.94. After losing 31.3% in 2015, the stock is up 34.3% since setting a multiyear low of $5.91 on Sept. 23. Barrick has a gain of 7.6% in the first three days of 2016.
Investors looking to buy Barrick should enter a good-till-canceled limit order to buy the stock if it declines to $7.49, which is the stock's 50-day simple moving average. Investors looking to reduce holdings should enter a GTC limit order to sell this stock if it rises to $14.11, which is a key level on technical charts until the end of 2016.