Top trader: A buying opportunity in gold stocks
From Jeff Clark, Editor, Delta Report:
I’ve been really nervous over the past two weeks.
You see, I sold out of my gold stock trading positions a couple of weeks ago. Ever since then, I’ve been anxiously looking for a spot at which to get back into the sector.
I like owning gold stocks. I think the sector will be much higher many months from now. And I’m uncomfortable not having any gold positions in my trading portfolio.
Selling out two weeks ago was certainly the right call. GDX is down about 8% since then. Now I’m trying to figure out the best spot at which to get back into the sector. Here’s what I’m looking at…
Take a look at this 60-minute chart of GDX…
Over the past two weeks, GDX has been making a series of lower highs and lower lows. During that time, the MACD momentum indicator has also been declining. And, as GDX dropped to lower lows, the MACD indicator hit lower lows as well. This action confirms the downtrend and it usually indicates that any bounce will be temporary.
So, it looks to me like there’s still a bit more room for the gold sector to decline from here. Perhaps GDX will make another lower low and decline to the blue support line on the chart at about $22.70.
But, here’s the good thing…
The MACD has bounced back high enough now that if GDX makes a lower low soon, then the MACD indicator will likely make a higher low. This “positive divergence” often occurs before a meaningful reversal. At the very least, it should lead to a tradable bounce in gold stocks.
Since this is a 60-minute chart – where patterns tend to play out within 3-5 days – there’s a chance traders may get a shot at buying back into the gold sector later this week, or early next week.
Best regards and good trading,
P.S. My gold stock analyses are only a small part of how I provide my Delta Report subscribers with huge, overnight gains.
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