Right on the heel of my oil short loss, I am taking another stab at shorting the market. This one is Barrick Gold (ABX.TO). I am moving away from shorting financials because the puts premium are almost doubled that of the calls! It seems that too many people are betting the banks will take a hit in the next fall.
In the long term, ABX.TO appears to be in an up trend. However, the intermediate trend is turning negative as shown in Figure 1. $45 is an obvious resistance for ABX.TO. Even with today’s positive market moves, ABX.TO fail to catch on the bullish wave and only touched $44.86 in the morning optimism (Figure 2). Who knows, perhaps it might break it sooner than later. But the reward/risk is decent to short ABX.TO seeing that the $45 resistance is right above.
Barrick Gold (ABX.TO)
I will give it a month’s time to move below $44.00. Worst case stop loss is $2.50 on the premium. That is ($2.50 – $4.00) x 100 x 3 = -$450 – $12.95 x 2 = $475.90 = 5% of account total. My mental stop is $3.00 on the premium. Which is about 3.3% of my account total.
ABX.TO intraday
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My name is Paul and I am a full-time engineer, part-time trader. Back in 2000, I deposited my $5000 interest-free student loan with an online broker. Since then, my interest in trading has become an obsession.
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[...] Gold short isn’t working as I hoped. My puts premium is moving closer to breakeven to my purchase price of $4.00. Furthermore, the market is cracking above resistance levels today. In particular, ABX.TO is [...]