Time To Get In These Gold And Oil ETFs (GDX, USO, SPY, DIA, QQQQ)
“As the market bounces around trying to find better footing, two interesting sectors are poised to benefit. Traders need to keep an eye on gold miners and oil for potential trend breaks. Let’s hit the charts and look under the hood. Gold miners are ready to run higher. Via the Market Vectors Gold Miners ETF (NYSE:GDX), miners are close to all-time highs. Watch the $54.80 level to be breached and then hold. A small position at current levels would be prudent with an add once $54.80 holds. Place a stop below last week’s bar around $49.50. All-time highs in (NYSE:GDX) were set in early 2008 with prices topping out $56.87. If (NYSE:GDX) tops this area and moves to all-time highs, traders could be capitalizing on a blue sky move,” Quint Tatro Reports From Forbes.
Tatro goes on to say, “Why is this area significant? Take a look at SPDR S&P 500 (NYSE:SPY), PowerShares QQQ (NYSE:QQQQ) or SPDR Dow Jones (NYSE:DIA) and it is readily apparent that prices are nowhere near their 2007-2008 highs. But here we have (NYSE:GDX) knocking on the door, signifying its leadership role. I am expecting a major advance from (NYSE:GDX) should it easily take out both of these resistance areas. Once the averages break out of the current sideways consolidation, names like (NYSE:GDX) should already be leading the pack higher.”
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“A name I have been watching for strength is United States Oil (NYSE:USO). In my opinion oil must run in order for this market to move higher. (NYSE:USO) has been in a base going back 14 months, and is now sitting on bottom support. (NYSE:USO) has excellent risk/reward at these levels. A stop around $30.80 is appropriate with upside potential to at least the top of the channel around $42.00. If (NYSE:USO) were to break higher from this channel it has the potential to get nutty. In that event, I will be prepared to hit it hard from the long side. The setups in these two names are enticing at these levels. There are clearly defined levels where we would be wrong and keep losses to a minimum. If traders and investors alike get on board with oil and gold mining stocks, then there will be plenty of opportunity to profit from these commodities,” Tatro Reports.
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