What’s the definition of “low risk”? Look at this chart of Barrick Gold (ABX). (July 21, 2016)

by DAN ABX 
I want to look at Barrick Gold ( NYSE:ABX ) here. At Stock Market Mentor we’ve been on gold for a while here, and it’s time to buy, again. The uptrend continues, a very rare test of the 50-day moving average. Each time it moves here we’re back again. I can’t think why this would fall through support when everything else in the gold sector is moving higher as well. This just gives us a good entry point with a stop, you could put it a little bit below the Bollinger Band and a little bit below the 50-day moving average. I would just say, 19.25, something like that. Because the whole reason for buying this right now is because you believe that it’s going to hold support at the 50 like its done before.

If it DOESN’T do that, if it starts moving below there, well then you would prefer not to have bought it, right? This is the definition of a low-risk entry; where you are buying, very close to the level at which you would say, “Oh crap! I’m wrong. I shouldn’t have done that.” You haven’t risked very much money in order to take a position in a stock that you believe is going to continue on an uptrend. Better to buy here, than here. And a lot of folks bought right here. How do we know this? Because that was the volume. So you want to buy uptrending stocks on pullbacks, not on rallies. Here’s your pullback, here’s your stop.

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