The stock's 40-day moving average has been bullish in the past
Earlier this week, we covered Wheaton Precious Metals (WPM), highlighting an intriguing buying opportunity for options bulls. Today, we'll be shifting our attention to another mining sector-member with an interesting technical setup on the charts, Barrick Gold Corp (NYSE:GOLD). The stock has enjoyed an impressive run higher, grabbing a seven-year high of $31.22 on Aug. 18. While the equity has spent most of its time since then consolidating just beneath the $30 mark, the stock broke north of that level yesterday, even if it is down 0.3% at $30.37 at last check.
What's more, GOLD just pulled back to its 40-day moving average, which has proved bullish for the security in the past. In fact, according to a study from Schaeffer's Senior Quantitative Analyst Rocky White, five similar signals have flashed for GOLD in the past three years. After 75% of these signals, Barrick Gold stock was higher, averaging a jump of 6.6%. With the security already within a chip-shot of its August high, a similar move would put GOLD well above this landmark, near the $33 level.
Barrick Gold could benefit from a round of analyst upgrades too, considering its impressive 76.7% year-to-date lead. Four analysts still say "hold," compared to nine calling it a "buy" or better. Plus, the 12-month consensus price target of $32.63 is a slim 6.7% premium to current levels.
Similarly to Wheaton Precious Metals, Barrick Gold options can be had at a relative bargain right now. The stock's Schaeffer's Volatility Index (SVI) of 46% stands higher than just 24% of readings from the past year. This suggests option traders are pricing in lower-than-normal volatility expectations at the moment.