Wednesday, July 13, 2011

Live Trade: GDX

The story with GDX here is almost the same as it is with SLV and GLD. We are more concerned about missing out on the next leg up then we are on getting stopped out for a small loss. You need to concern yourself with the last two days of trading (today included) to see what I am talking about.

GPX gapped up today above its 50 day moving average. The 50 day moving average has very little predictive value so far, but the break of resistance at $58 is significant. Nevertheless we have mixed messages from the momentum indicators. The stochastic is at 88 percent in the overbought range, but they is not turning over. Meanwhile the MACD is bullish, turning up with the short line separating from the long line, indicating that the upward momentum is accelerating.

Now I cannot say anything about the future, but for now the risk reward ratio favors at least stepping even intrepidly into GDX here. Let's enter with half of a position with a stop at the top of today's gap or the 50 day moving average.

Buy 1/2 GDX at $59.42.
Stop at $57.34.

1 comment:

Anonymous said...

great, TNXE6!