Barrick Gold Corporation (USA) (ABX) — I deemed ABX stock my No. 1 gold miner to buy in the April 13 Trade of the Day with a target of $20-plus. Those who have held over the past few months have certainly been well rewarded.
I first recommended shares of the world’s largest gold miner (based on production and reserves) on Nov. 25, when gold was trading at $1,074 an ounce. On Wednesday, ABX stock jumped 2.6% despite the 0.2% pullback in gold to $1,268 an ounce ahead of today’s Brexit vote.
Some analysts say that gold could hit $1,400 if the United Kingdom decides to leave the Europe Union (EU). Indeed, when a Brexit — which most think would result in a big global sell-off in stocks, at least initially — looked likely earlier this month, investors flocked to the relative safety of gold and miners like Barrick.
In the past week, though, the yellow metal and gold stocks have pulled back as polls favored Britain remaining in the EU. If the Brexit is voted down, the Federal Reserve will be more likely to raise interest rates, and gold could fall further.
With these factors looming and ABX stock up more than 160% since my recommendation to buy at $7.50 in late November, it’s time to lock in profits.
Turning to the chart, we see ABX stock broke above its 200-day moving average at about $9 in late January and then traded in a well-defined bull channel with support at the 50-day moving average for six months. Shares exceeded my $20 target earlier this month on Brexit fears, hitting a high of $21.40 last week — the highest level since February 2014.
With a new sell signal from the MACD indicator and light buying by hedgers who need protection from the Brexit, now appears to be the time to sell ABX stock.
