Barrick Gold Corporation (USA) (NYSE:ABX) — This Canadian miner is the largest gold company in the world in terms of production and reserves.
On Oct. 30, S&P Capital IQ raised its opinion on ABX stock to a “strong buy” from “hold” despite cutting its 2014 and 2015 earnings estimates. Its 12-month target was lowered by $5 to $15 on continued weakness in gold prices. However, at the time, its analysts said that gold prices appeared to be nearing a bottom. And indeed, they look to have bottomed in early November. Capital IQ also said Barrick could benefit from improved cost controls.
ABX stock rallied 4% Friday as gold futures gained 2% to $1,278.50 an ounce on weaker-than-expected U.S. GDP data. The miner could also benefit from a GDP contraction in Canada, which missed expectations and fell 0.2%. In addition, an eventual approval of the Keystone XL Pipeline, though currently stalled by a possible presidential veto, could increase the value of the Canadian dollar versus the U.S. dollar.
The chart indicates the trend for ABX stock has reversed following a double-bottom and reversal in January that sliced through its 50-day moving average on a breakaway gap at $11.66. Shares are currently consolidating at a double-top at $13.12.
The highest volume of buying in more than two years turned the internal MACD indicator positive and put the 200-day moving average at $15.26 in sight as the next price objective. A longer-term target of $18, which is more than 40% above current prices, seems attainable.
