Call Buyers in Barrick Gold Score Big Gains as Fear Grips Global Markets
Barrick Gold (GOLD) shares are +33% YTD with much of the gains coming in the last few weeks as Gold prices have soared. In the write-up detailing the positioning I note to members the June $20 calls are attractive for $1.20, and those calls are trading near $6 less than a month later!
The original write-up was as follows:
“Barrick Gold (GOLD) seeing a lot of call buying in 2022 including this week with buyers of 3000 September $21 calls and 6000 May $21 calls on 2/10 while 31,500 March $17 calls in open interest from large buys of over $6.5M on 2/4 and also seen buyers in March $16 and $18 calls. GOLD also has 16,000 June $22 calls in open interest from buyers back in October and 25,000 of the June $21 calls. GOLD shares have a multi-week base forming above $18 support and seeing a bullish RSI trend during the basing process which favors an upside breakout with weekly RSI just under 50. Shares need to close above $21.20 for a confirmed base breakout that measures to $25 while the 200-day moving average is at $20.22. GOLD will report results on 2-16. Barrick is engaged in the production and sale of gold, as well as related activities such as exploration and mine development. Barrick also produces significant amounts of copper (20% of business). GOLD has a market cap of $34B and trades 17.4X Earnings, 6.7X EBITDA and 20.3X FCF with a 1.87% dividend, a cheap name though limited growth seen ahead unless Gold prices move higher. Barrick has shown a lot of interest in investing further in Canada and sees huge opportunities in Nevada. Analysts have an average target of $26 with short interest low at 0.9% of the float. CSFB is positive on Barrick and the sector on re-rate potential with strong FCF in 2022.”
We can see the large amounts of call open interest accumulating in June in the Hawk Database: