Why did we add Barrick Gold Corp (ABX) into strength after it was up 3% from today's spike low at 44.76? Because the sharp intraday recovery rally occurred after what looks to me like the completion of a significant correction off of the 47.55 high from 9/22.

If my pattern work proves correct, then today's low should not be violated prior to ABX breaking out to the upside above key multi-month resistance between 47.55 and 48.02. Let's notice on the enclosed weekly chart that ABX has carved out a series of rallies since January that have stalled around the 47.50 area, which have been followed by pullbacks to higher-corrective lows. Successive higher-lows followed by rallies to 47.50 are putting increasingly intensive pressure on the horizontal or flat top, which should be hurdled and will trigger an optimal target of 55.80-56.30 in the subsequent days and weeks.

At this juncture, only a violation of today's low at 44.76 will compromise the above-described bullish technical set-up.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.