Gold Stock Still Has Upside
05/07/2010 12:01 am EST
Gabelli Global Gold, Natural Resources & Income Trust (GGN) - This non-diversified, closed-end management fund invests in the equity securities of companies principally engaged in the gold and natural resources industry.
GGN provides a steady dividend return, as well as a way to participate in major metals mining stocks.
I have chosen GGN as the “Trade of the Day” multiple times in the past year and a half when the stock approached its 200-day moving average.
Every recommendation turned out to be close to the low of a cycle, rewarding buyers with not only a good trade, but an excellent dividend yield for those who held the stock. The $1.68 dividend is paid monthly, and at the current price, it provides an annualized dividend yield of 9.98%.
The recent minor head-and-shoulders top has a downside target of $16, which coincides with the bullish support line at the same level.
Despite its appreciation from under $14 at this time last year, GGN is still in a powerful bull market with a target in the mid-$20s.
By Sam Collins of OptionsZone.com.