Equity Clock

Earnings Season: Barrick Gold Corporation (USA) (NYSE:ABX)

Clock_That_Stock

It is earnings season once again and in honor of this highly anticipated event we will be profiling one stock each day that investors will we watching once the quarterly earnings results are released. With the highs we’ve reached to date, market reaction to these earnings results will be imperative to determine whether the uptrend will continue or if a correction is set to occur. Please join us over the next few weeks while we give you the information you need before the companies report.

The Stock

Barrick Gold Corporation (NYSE:ABX, TSE:ABX) reported earnings this morning that beat expectations on record first quarter profits. Earnings amounted to $758 Million, or 76 cents on a per share basis. The company cited higher production, lower costs and higher metal prices that put the bottom line over the top. Investors had expected the company to report 62 cents per share, still significantly exceeding the year ago period of 34 cents per share. According to Reuters, “Barrick Gold Corp. announced that it is on track with its guidance to increase production in fiscal 2010 to 7.6-8.0 million ounces at lower total cash costs of $425-$455 per ounce or net cash costs of $345-$375 per ounce.” The stock has rallied today to around 4% on both sides of the border.

The stock has shown reasonable gains following Q1 earnings reports in the past, gaining 8% to 12% in the period following. With investors flocking to the safety of Gold and the favorable impacts on the bottom line of this company as a result of the economic downturn, history looks likely to repeat. Goldcorp reports tonight, and investors will be expecting the same favorable results from this company as well.

Chart Courtesy of StockCharts.com

The Clock

Barrick Gold customarily rallies coming off of Q1 earnings season to the tune of 7% by the end of May, on average. The stock has been strong in the last two sessions and appears poised to continue this strength in the short-term.

Barrick Gold Corporation (ABX) 40.67

+ 0.21 (0.52%)

Seasonality Analysis

Analysis has revealed that with a buy date of October 22 and a sell date of September 23, investors have benefited from a total return of 481.62% over the last 10 years. This scenario has shown positive results in 8 of those periods.

Conversely, the best return over the maximum number of positive periods reveals a buy date of October 23 and a sell date of December 28, producing a total return over the same 10-year range of 317.12% with positive results in 10 of those periods.

The buy and hold return for the past 10 years was 147.98%.

Technical Analysis

Support 2

Support 1

Pivot Point

Resistance1

Resistance2

The Numbers

39.32

39.99

40.47

41.14

41.62

Most Recent Close:

40.67

Support/Resistance Analys

Neutral

52-Week High:

48.02

MACD Analysis:

Positive/Increasing

52-Week Low:

28.54

MACD vs. Signal:

Bullish MA Crossover

Fib. Retracement:

~ 61.8%

RSI Analysis:

Bullish

50-Day MA:

39.19

Stochastic (Fast) Analysis:

Neutral

200-Day MA:

38.26

50 vs 200-Day MA Analysis:

50-day Above 200-Day MA

High Critical Level:

40.78

Year over Year Trend:

Strongly Gaining

Low Critical Value:

37.76

Critical Level Analysis:

Within Critical Levels

Average Monthly Gain:

3.4%

MFI Analysis

Above 50 Declining

Technical Rating:

Candlestick Analysis

Neutral/Indecision

On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels.

Situational Analysis

Past Year

Advancing Sessions %

Return %

10-Year Average

Advancing Sessions %

Return %

Apr 27 thru May 27

47.6

20.1

Apr 27 thru May 27

8.2

Best Return: 25.9% – Sell May 22

Best Return: 13.2% – Sell May 15

Apr 27 thru Jul 26

48.4

17.8

Apr 27 thru Jul 26

49.2

3.5

Best Return: 26.8% – Sell May 29

Best Return: 18.8% – Sell Jun 10

Apr 27 thru Oct 24

49.2

25.2

Apr 27 thru Oct 24

49.3

2.8

Best Return: 33.4% – Sell Sep 4

Best Return: 25.7% – Sell Jul 29

Following Earnings Releases in General – Last 12 Periods

Following Q1 Earnings Releases – Last 4 Periods

12-Period Average

Advancing Sessions %

Return %

4-Period Average

Advancing Sessions %

Return %

After 30 Days

49.2

4.1

After 30 Days

51.2

8.4

Best Return: 12.4% – After 12 Days on Average

Best Return: 16.4% – After 13 Days on Average

After 60 Days

50.4

8.9

After 60 Days

50.3

9.5

Best Return: 19.3% – After 28 Days on Average

Best Return: 19.2% – After 25 Days on Average

After 90 Days

50.3

9.5

After 90 Days

50.4

11.9

Best Return: 24.7% – After 48 Days on Average

Best Return: 25% – After 47 Days on Average

Further Analysis

Sector:

Basic Materials

Industry:

Gold

According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Materials Sector ranges from November 19th through to May 5th. Seasonal strength in the sector corresponds with the traditional period when demand for base materials increase.

Current Consensus Recommend:

Outperform

Recommendation 1-Month Ago:

Outperform

Recommendation 3-Months Ago:

Outperform

Disclaimer

Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.