Dummy Gapper Trade of the Day - Barrick Gold Corporation (USA) (Public, NYSE:ABX)

ABX is a WL stock and was also a Briefing.com gapper this morning along with several big gold plays on expectations for 2008. Gold is also a flight to safety in an uncertain geopolitical environment. ABX gapped up just above yesterday's range into R2. The second bar was inside, closing on the cusp of R2. I placed a buy stop order two pennies above the ORH.

The daily chart highlights two targets. The lower line is a minor pivot area at the round $ number $42.00 and lines up closely to the 62% Fib. extension of the previous day low to the ORH. The second level target is the November reaction swing high.

I took a partial after price tagged the 62% Fib level and pulled back. I was prepared to allow for a 38% retracement of the move from ORL to the morning swing high, but price held the 5 period ema on a closing basis, carving out a bullish flag on declining volume. Afternoon trade involved several consolidation zones, however, price held the 5 ema which had a nice 45 degree angle, and there was never any reason to exit the trade until the close as the 2nd level target felt like it could be attained as volume accelerated into the last hour.