Thursday, January 14, 2010

All that glitters just might be gold!

I stumbled across a pretty interesting chart. I had noticed earlier today that the gold miners were down in spite of an up day in gold. So, I had a look at the chart of the gold bugs index ($HUI) a little while back. And its at a very interesting position!!

$HUI is indicating that gold miners are a screaming buy right now!! Its right at the top of MA(20) and above an important trendline. Now that's what I call a low risk setup with an obvious place to set up your stop. If gold cooperates there is no reason why we should not see a decent bounce in the gold miners from here.

And it gets even better, here is a longer term chart.

BTW, if you like the above chart, wait till you see the Palladium chart!! I will post those later tonight.

Here are a few gold miners that I keep track of. While the individual charts are not that impressive, I like these plays because of the above shown overall gold bugs index chart.

If you want to pick a setup that has shown considerable strength even during gold's recent correction, then EGO is the pick for you. Hasn't suffered a major correction like other gold stocks. In fact, it was up today too despite the gold miners index being down. Watch out for a clean break of 15.

AUY - MA(20) providing support. So your stop point is obvious.

NGD - A smaller miner. I like it over 4.40


XRA - A break of 8.50 and we are off to the races again!

Palladium just made new 52-week highs even as I was preparing this post. I will post about it later tonight.

Good Luck tomorrow!

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