A Golden Opportunity?
As the majority of stocks and major indices continuing their erratic behavior, it's becoming more difficult to find strong trends. With the bulls and bears fighting for the upper hand, most sectors remain choppy to sideways at best. However, gold has started to come alive and is now trading at 5 month highs.
Without getting into the reasons why gold has started to move higher or the potential catalysts that have historically worked well for gold, lets just concentrate on price.
Gold has been trying to bang out a bottom for over 4 years. In technical terms, it has formed a potential rounding bottom and has finally pushed through and closed above 1240/1250 resistance.
The next most obvious and major area of resistance is 1370 and is approximately 10% higher from current levels. This is not a huge move but it's a potential bullish sign for gold, silver and the related stocks and is well worth keeping an eye on.
A big gap up follow through rally on Monday was soon met with heavy selling on Tuesday. By the end of the week the major indices were trading back at October/November lows except for the Russel 2000 which broke through support and is now testing February's lows.
The sector action is back to playing defense and it's worth noting that Apple's stock continued to slide bringing it's sell-off close to 30%.
The amount of stocks trading at or near fresh highs is diminishing. Many of the names that were making a run at old highs were hit with strong selling on Friday.
Below are five of the stronger trending stocks on my CM50 (Canadian MegaTrends) & UM50 (US MegaTrends) lists.
Remember that chasing stocks higher is not recommended and even the strongest trending stocks can experience significant drawdowns.
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