Are Gold Stocks Ready for Takeoff? Try Some GDX
Gold and Energy stocks both spiked today, energized by a looming deadline with a defiant Iran and downward pressure on the dollar. Gold futures surged $14 on news that Iran will reject the UN demand that it cease enriching uranium. The U.S. can't afford this war, but with the Republicans at serious risk of losing control in Washington, I wouldn't be surprised to see a significant "distraction" before November. Add the fact that we are approaching gold's seasonal high period and the action today looks be the start of the explosive wave that we and many other analysts have been forecasting.
It was particularly confirming to see the HUI continue to rise throughout the day and close strongly into the last 15 minutes of trading (kissing 345). A day like today (5.4% HUI jump) is indicative of the start of a new rally. I think we will see the HUI take out our 353 buy signal tomorrow or by Friday at the latest. When this occurs, we are backing up the truck and buying with both hands. The opportunity to make a massive amount of money is upon us.
The GDX (Market Vectors Gold Miners ETF) is an excellent mechanism for profiting on this upcoming run, as it tracks the price and yield performance of publicly traded equity securities of gold and silver mining companies, thus providing the leverage of mining stocks with diversification across a basket of companies. What does this leverage look like? GDX was up 4.9% today, while GLD (which tracks the price of gold bullion) was up just 2.3%. GDX provided more than double the gain!
The chart for GDX is looking beautiful as well. We saw a nice bounce of the 50-day moving average last week and have seen higher highs and higher lows since June. The latest candlestick formation is also very bullish, as you can see looking back at past price action each time this pattern was generated.
Action: We will pick up GDX, in addition to more of our previous pick: NXG, and our favorite silver play: SLW as soon as the HUI confirms this breakout by closing above 353. Don't be too quick to take profits, as this run should be sustained for several months.
It was particularly confirming to see the HUI continue to rise throughout the day and close strongly into the last 15 minutes of trading (kissing 345). A day like today (5.4% HUI jump) is indicative of the start of a new rally. I think we will see the HUI take out our 353 buy signal tomorrow or by Friday at the latest. When this occurs, we are backing up the truck and buying with both hands. The opportunity to make a massive amount of money is upon us.
The GDX (Market Vectors Gold Miners ETF) is an excellent mechanism for profiting on this upcoming run, as it tracks the price and yield performance of publicly traded equity securities of gold and silver mining companies, thus providing the leverage of mining stocks with diversification across a basket of companies. What does this leverage look like? GDX was up 4.9% today, while GLD (which tracks the price of gold bullion) was up just 2.3%. GDX provided more than double the gain!
The chart for GDX is looking beautiful as well. We saw a nice bounce of the 50-day moving average last week and have seen higher highs and higher lows since June. The latest candlestick formation is also very bullish, as you can see looking back at past price action each time this pattern was generated.
Action: We will pick up GDX, in addition to more of our previous pick: NXG, and our favorite silver play: SLW as soon as the HUI confirms this breakout by closing above 353. Don't be too quick to take profits, as this run should be sustained for several months.
posted by goldguru at 22:28
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