Trade of the Day: Barrick Gold Corporation (NYSE:ABX)

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My indicators are giving pretty strong bearish readings this week, but we saw a one-day reversal on Thursday, which was a bullish sign. Like last week, when my signals were almost too bullish, this week’s sell signals may have overdone themselves. Furthermore, there is a search for yield going on at this time, so even some energy stocks are rising.

While I think the panic has been overdone, there’s a lot of concern about the British exiting the eurozone. The betting parlors odds are still 2:1 in favor of Britain remaining in the euro zone, however, which is telling. Ultimately, we’ll have to wait until June 23 when the votes come in before we know the final outcome.

So, the question that should be on investors’ minds is where is all of this capital flowing? With bond yields dropping, it’s evident that some of those funds are being reallocated into the bond market. Funds are also being deployed into gold because the precious metal actually has a lot more value than the worthless paper that central banks are printing these days.

And on that note, we’ll make move to play strength in precious metal as market uncertainly continues to cloud the picture for stocks that are bumping up against some stiff resistance.

Buy to open the Barrick Gold (ABX) Aug 22 Calls (ABX160819C00022000) at $1.10 or lower. 

InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. It’s the perfect “bridge” between investing in ordinary stocks and the turbocharged world of options trading. In Maximum Options, he brings you his personal trades using high-probability, “professional grade” strategies.

Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.

 


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