3 Gold Stocks Popping on Bullish Brokerage Notes

ABX stock is staring up at key technical resistance

by Karee Venema

Published on Jan 12, 2018 at 10:28 AM
Updated on Jan 12, 2018 at 10:42 AM

News of a political breakthrough for German Chancellor Angela Merkel has the U.S. dollar cooling against the euro. In turn, February gold futures are flirting with four-month highs, while a fresh round of bullish brokerage notes is also drawing attention to gold stocks. Among those in focus are Agnico Eagle Mines Ltd (NYSE:AEM), Barrick Gold Corp (NYSE:ABX), and Yamana Gold Inc. (NYSE:AUY). Here's a closer look at how shares of AEM, ABX, and AUY are performing today.

Agnico Eagle Mines Stock a Top Pick at Desjardins Research

TD Securities boosted its price target on Agnico Eagle Mines stock to $55 from $53 -- a nearly 19% premium to last night's close at $46.30, and sitting in territory not charted since September 2016. The security was also named a 2018 top pick at Desjardins Research.

The upbeat analyst attention has the gold stock trading up 0.1% at $46.34. Since hitting a near-term low of $40.70, AEM shares have rallied roughly 14% -- taking out recent resistance from their 200-day moving average along the way.

Nevertheless, options traders have been buying to open puts over calls at an extreme pace, albeit amid relatively low absolute volume. AEM stock's 10-day put/call volume ratio of 2.94 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 100th annual percentile.

Barrick Gold Call Options Hot Amid Rebound

Barrick Gold stock saw its price target lifted to $17.50 from $17.00 at TD Securities, representing expected upside of 19.5% to Thursday's close at $14.65. The bullish brokerage note is being well received, with ABX shares are up 0.6% to trade at $14.74.

Longer term, the security is down nearly 28% from its April high of $20.37. And while ABX stock has come off its Dec. 7 annual low of $13.28, it's staring up at the $15 mark -- home to its descending 80-day moving average, and a 23.6% Fibonacci retracement of the equity's April-to-December retreat.

Options traders have remained unusually upbeat toward the gold shares in recent weeks, though. At the ISE, CBOE, and PHLX, ABX's 10-day call/put volume ratio of 13.38 ranks in the 96th annual percentile, meaning calls have been bought to open over puts at a faster-than-usual clip.

Analyst: Yamana Gold Production Forecast Could Lift Investor Confidence

CIBC raised its price target on Yamana Gold to $3.75 from $3.25, with the brokerage firm saying the company's stronger-than-expected fourth-quarter gold production estimates "bode well for market sentiment and investor confidence." As such, AUY stock is up 1.2% to trade at $3.38.

After putting in an intermediate-term bottom at $2.40 in early December, the security has jumped almost 41% -- and is on track for its highest close since mid-February. Part of this recent upside has likely been driven by short sellers, with short interest down 38.4% in the two most recent reporting periods to 17.58 million shares. It would take fewer than two sessions to cover these remaining bearish bets, suggesting this particular source of buying power is nearly exhausted.


a schaeffer's exclusive

2018 TOP STOCK PICKS

Access your FREE insider report before it's too late!


MORE | MARKETstories


Dow Skyrockets 322 Points to Close North of 26,000
A big day for Boeing helped overshadow Goldman Sachs earnings
Netflix, Blue-Chip Earnings, GDP Headline Busy Week
GE, JNJ, PG, and VZ are among the Dow components reporting earnings
Tesla Stock Options Traders Target Key Level Ahead of Expiration
The Nikkei, meanwhile, ran an article on Tesla's finances
Call Buyers Bet On Beaten Down Papa John's Stock
Papa John's CFO just left for a restaurant peer

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

TRADING SERVICES | FEATUREDproducts


By MG 2016
In March of 2016, I was introduced to Expiration Week Countdown.  The results are better than words!
Options trading made simple.
Schaeffer's Investment Research, Inc. is dedicated to providing subscribers advantages in options trading and investing.  Our independent market research services create profitable opportunities for investors at every level.