During the fast-paced Lightning Round segment of Wednesday's Mad Money program one caller asked about Barrick Gold (GOLD) . "I like it and I think you should own it," was Jim Cramer's advice.
Let's dig into the charts and indicators and see what we find.
In the daily bar chart of GOLD, below, we can see that the shares have struggled the past 12 months. Prices turned lower in October and made a low in late February. A good bounce got under way in March but prices reversed direction in May. Prices made a gap lower in June but shows fresh bottoming action around $21 in recent weeks. Prices are below the declining 50-day and 200-day moving average lines.
The On-Balance-Volume (OBV) line made a modest rise from March to May to confirm the price gains but it has also weakened into June. A fresh rise in the OBV will be a positive for the stock should it materialize.
The Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside from below the zero line. This signal is a cover shorts buy signal.
In the weekly Japanese candlestick chart of GOLD, below, we see a mixed picture. Prices are still correcting a run up into the middle of 2020. GOLD is trading below the declining 40-week moving average line but a weekly close above $23 would change that condition.
The weekly OBV line looks like it is making a higher low with the price action but we are "not out of the woods" just yet. The weekly MACD oscillator is bearish.
In this daily Point and Figure chart of GOLD, below, we can see a nearby price target in the $22-$23 area.
This weekly Point and Figure chart of GOLD, below, is projecting a price target in the $16 area. Weakness under $20.22 is needed to weaken the picture.
Bottom-line strategy: Traders may need a flexible approach to trading GOLD in the second half of 2021. The shares could continue to rally and could retest the May highs but the weekly Point and Figure chart suggests we could make new lows for the move down. Pay attention to the movements in the Dollar Index (DXY).
