The market summary for Randgold Resources Ltd. (GOLD) is being released approximately 90-minutes before the close.
The purpose for this early release is to document that we have identified a low-risk point in GOLD.
The daily chart below shows our definition of low-risk.
Chart by TeleChart
- If GOLD continues to hold and there is no unexpected event in the next 90-minutes, then we can see that the trend line is intact.
- Price action has contracted on low-volume (and important clue) to come within 1.34 of yesterday's low of 78.07.
- Therefore, an entry around 79.41 would have a stop located at 78.07 for a total "risk" of $1.34/share. This is not as good as our 12-cent stop at the initial entry. However, it is an opportunity.
While it is true that the next session may see something unexpected and the low (and the stop) penetrated..... there are always unknowns. At this point, the probabilities do not favor that scenario.
Note: We have moved our position stop all the way up to yesterday's low: 78.07. If this low is penetrated, the trendline has failed and we want to be out on the side-lines.
Disclosure: I am long GOLD.