Double Top in ABX

Add Puts Now!

By Bryan Bottarelli
Tuesday, March 04, 2008 1:20 PM EST
Tue, 4 Mar 2008 18:20:00 GMT

Dear Bottarelli Research Member,

We all know about gold’s historic upside run to $1,000. But I have a sneaky suspicion that a majority of this increase came due to short-term speculators searching for a safe-haven in the shiny yellow metal. Now, I think that these short-term speculators are taking their profits off the table and looking for the next place to park their money (steel or coal, perhaps?). But regardless of where their money goes next, it appears like gold stocks like Barrick Gold (ABX – NYSE) could be at the end of their nice upside run. Chart-wise, ABX has just established a double-top failure at $54.00, and this could be an early indication that shares could move back down to at least $48.00. Therefore, let’s make a quick “sniper” profit by playing this fall. Here’s the trade:

ABX

PLAY: Buy the ABX April 50 Puts (ABX PJ) at or under $2.70, good for the day. Place a “sniper” sell order at $3.30 and a protective stop limit $1.40.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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