For his "Executive Decision" segment of Mad Money Thursday night, Jim Cramer spoke with Mark Bristow, president and CEO of Barrick Gold (GOLD) , to find out more about the merger mania in the industry. Barrick is currently in discussions to acquire Newmont Mining Corp. (NEM) , which is itself attempting to merge with Goldcorp (GG) .
Bristow confirmed that discussions with NEM were ongoing and the combined entity would deliver tremendous value for the shareholders. He said the one universal truth in the mining business is that high quality assets make money, and GOLD and NEM both have incredible assets. A deal could be done without issuing a single new share of stock, Bristow noted.
Newmont and Barrick are already engaged in a joint venture in Nevada. Bristow said Nevada is attractive, geologically speaking, and is far more desirable than other, more hostile, locations around the globe. Let's see if the charts are desirable.
In this daily bar chart of GOLD, below, we can see two trading ranges. One trading range is over the past five months where GOLD has traded sideways between $11.50 and around $14.10. The second trading range is viewing the past 12 months as a sideways range from $9.50 to around $14.
The price action from August shows a growing list of positive signals. Prices are above the declining 50-day moving average line and above the flat 200-day moving average line. Trading volume from September has been heavier than from last March to August.
The daily On-Balance-Volume (OBV) line has been strong from August and tells me that buyers of GOLD have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line in late September for a buy signal but the indicator has been "hugging" the zero line recently.
In this weekly bar chart of GOLD, below, we can see these trends.
A decline from $23 down to near $9, but there is also a sideways trend or base from early 2018 with prices trading between $14 and $9. GOLD is currently above the bottom 40-week moving average line.
The weekly OBV line has been neutral for most of the last three years but this January it made a higher low which could be the start of a turn higher.
The weekly MACD oscillator is above the zero line in bullish territory.
In this weekly Point and Figure chart of GOLD, below, we can see that a downside price target is being projected but I want to point out that a trade at $14.13 will be a major upside breakout.
Bottom line strategy: Regular readers of Kamich's Korner on Real Money may remember a story I wrote on the six-year saucer bottom pattern on gold bullion with a neckline at $1,375. Now you can add the $14.13 breakout level on GOLD to your market minder.