Tuesday, February 17, 2009

Failure Leads to Fast Move - Barrick Gold Corporation (USA) (Public, NYSE:ABX)

Entered ABX long on a mini base & break. Price rallied up to R2 - whole $ level and carved out a tweezer top reversal, putting the position into a slight loss. As price exit the retracement zone, I sold twice the size for a short. Failures usually lead to fast moves and that's exactly what ABX gave us. Took a partial after 3 WRBs and exit balance at S2. ABX is a usual suspect for me and I mentioned gold in last night's technical post.

Someone requested that I explain how I use MAs. I use them for support/resistance. On the 5 minute chart below, we note that price never closed above the downsloping 5 EMA until the primary target S2 was met. Price and the EMA are like magnets, so if price gets too far ahead of the EMA, expect a retracement.

Crossovers are good indicators of the bias. If the EMAs crossover above price it is very bearish and vice versa.


yr said...

Hi Jamie,
Can you share why your target is S2 instead of S1?

Can you take a look at GS today. I think there is a good short entry when it gapped down, retrace but failed to go pass $90. Would a break of 10.50am ET 5 min bar low be a good entry point? There were a few IBs after this bar. Thanks

PDT said...

YR, you had to mention GS. I got slammed today on GS for one of my swing trades. I should have exited after the potential double topped form last Friday. Any thoughts on the swing trade? Bought the rebound of $90 last Wed and held till today.

Jamie said...


I'm really focused on R2 and S2 and whole $ levels.

GS consolidated at the round $ level which was the edge of the retracement zone, and couldn't break above so it was a good place to get short below the outside bar as you point out.

Jamie said...


You're right when GS backed off of $98.00 for the second time Friday, you should have exit at least half. Your stop had to be $90.00, so I hope you are out.

A lot of the stronger financial stocks failed on Friday. V was a good short when it failed at $58.00, MA was also a short if you could get shares. I think we might see a deeper retracment until the markets settle.