Monday, October 5, 2009

Quck Comments on gold stocks

A few comments about gold stocks:  The US Dollar is weak and as a result, gold metal is up as well as gold stocks:

Here\'s the daily chart of GLD, so far it has formed a higher low, let\'s see if it can move up from here and make new highs.  GLD and DGP are on the watch list, stops go just below the higher low that was formed last week. GLD dynamic chart

Next, here\'s the 15 min GDX chart, the ratio crossed in the trendline in the morning as well as the 60 period stochastics, I have drawn a new uptrend line on the ratio

Next, here\'s the 60 min GDX chart, one thing I want to point out however is that volume is not impressive on this move and it\'s still below the downtrend line, therefore if you are long gold stocks, still use some caution and keep an eye on this

here\'s a couple of other charts:  GDX daily chart is still potentially in some kind of bull wedge pattern, watch the downtrend over the ratio. GDX dynamic chart

here\'s some individual gold stocks:

HL, bounced off support last week, watch the downtrend line on the HL/GLD ratio as well, stochastics are also oversold. HL dynamic chart

NG - the consolidating volume suggests a bull flag wedge pattern, watch the trendline of the wedge as well as the downtrend line over the NG/GLD ratio. Stochastics are nearing oversold.  NG dynamic chart

In short, keep an eye on the volume, that needs to increase, if you own any gold stocks, have a stop in place or use the ratio to help define entries and exits, the 15 and 60 min GDX chart works fairly well for this.  

Gold stocks are also moving somewhat with the general stock market (SPX), therefore if the market continues to recover, then gold stocks probably will do so as well, but if today\'s up move in the general market is simply an oversold bounce (remember SPX 1041.2 is the major resistance), and the market heads back down again, gold stocks could get dragged down as well.  Currently on the watch list, we still have GLD and DGP with stops. 

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