Simple Trades in the Gold Sector
share
share
share
share
share
Our breakout model finally confirmed the much anticipated BO#4 a few days ago, and alerted us to be aggressive buyers of the gold sector.
BO#4 is now confirmed, and there is one more final hurdle, by exceeding resistance at the .60 level . Nevertheless, the breakout alerted us to watch for set ups in the gold sector.
US traders bought GDX at $39.35, with stop at $38.44, risking just over 2%.
Canadian traders bought XGD at $77, with stop at $75.45, risking 2%.
Summary
Prices in both ETFs are now approaching resistance. If the breakout model is correct, the resistance should not be a problem as prices should exceed it and challenge the May high in the next few weeks. Risk/reward on these two trades are very attractive, as we are risking 2% for a potential 20% return if the May highs are reached, and more if they are exceeded.
********
share
share
share
share
share
Jack Chan is the editor of Simply Profits, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the US dollar bottom in 2011.
More from Gold-Eagle
