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Weekly Chart in Gold ETF (GDX) Shows Opportunity
10/06/2009 12:01 am EST
Market Vectors Gold Miners ETF (GDX) - This exchange traded fund (ETF), which attempts to replicate the price and yield performance of the Amex Gold Miners Index, is in a bull market with both the long-term support line and the 200-day moving average at $37.
On August 19, at $37.46, I said, "This seems to be an attractive entry point for this ETF, which formed a very bullish cup-and-handle formation, and, in March, a gold cross. The target for this investment is $50 to $55. Place a stop loss at $33."
On September 16, GDX hit a new high at $48 and then succumbed to profit taking.
The October 2 close is near to the first major support—the 50-day moving average (blue line) at $41.75—so first-time buyers may eye this area for a half position.
Volume on the recent pullback is high but declining, indicating that a climax has or is about to occur. A full position could be initiated below $40.
The trading target remains unchanged at $50 to $55.By Sam Collins of OptionsZone.com
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