Pullback in Gold ETF Offers Traders a Second Chance
01/04/2010 10:49 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 the bull market support line at $44 and the 200-day moving average at $42.
This has been a very successful trading stock for our "Trade of the Day." After initially recommending traders take a half position, our last comment on November 4, with the stock trading at $46.64, was "A full position could be initiated below $40.
The trading target remains unchanged at $50 to $55."
The stock didn't pull back to $40, but did run to $55.40.
Now, GDX appears to be in buying range again after a healthy round of profit taking and a reversal off of its major bull market trend line, coupled with a stochastic buy signal.
The trading target for GDX is $52, but crises or renewed inflation could result in much higher prices.
By Sam Collins of OptionsZone.com