10 Gold stocks on fire or almost

[metro]

Last week the gold indices broke out - both the XAU and HUI have similar patterns and here is the HUI



They broke a 10 month trend line then came back to test it then shot up again. Gold is still related to the actions of the US dollar so if the dollar rallies then gold stocks will likely pull back. This looks now like this may be a extended multi-month move as so many gold stock charts have broken out or look close to doing so.

I like to pay attention to the top Bollinger bands and lighten up when a stock gets too extended. I keep many stocks on one trading page and if we get a day like yesterday when gold is set to move then I buy a basket of them or add to ones I have and day trade part to lock in gains as gold can move with world situations.

Here 10 stocks that have either broken out in the last several days or may be about to. A couple are silver stocks and they are not yet as strong.

The Nasdaq has been pulling back and may continue a while and if the correction picks up while gold is strong then many will run to gold for safety.

Here are some charts - they are not live charts so as of yesterday's close.























Many of the stocks on this site are momentum related and stock are bought that are already extended. IMP for gold stocks unless yo are buying for a several month hold it is not so good to chase them. It is better to buy on pull backs. You can see that several of the stock here moved up then pulled back to test support and that is where it is best to buy. Pay attention to a shorter term chart of the HUI and or XAU and to the price of gold - chart below:



BTW - you can just play the price of gold with the ETF with the symbol GLD it trades at 1/10 the price of gold and trades like a stock so you can go long or short.

Also  - here are links to the components of the HUI and XAU for your quick check on news and prices.

http://finance.yahoo.com/q/cp?s=%5EHUI

http://finance.yahoo.com/q/cp?s=%5EXAU

And just for fun - there are sometimes real momentum plays in gold stocks also like USGL



but it is not the norm and of course very risky. There are so many gold stocks now that look very positive so have fun and make some money.

[eliteG]

A really great post!  <everything you need to know about gold> (applaud)  Thx Metro.  Good to see you around again.

Applaud this guy.. look at all this work and insight. 

[Melf Elf]

Nice work.  Applause.  Thanks.

[cumulina]

Yes!

Big applause 

Here is a nice link for gold-diggers...

http://www.goldsheetlinks.com/goldsheet.htm

[saffeysite1]

Metro,

Nice work put into all the info we need about Gold and the indexes.  A def. applaud.  You know your Gold.

That's what I love about this site, so many people with different strengths.  "One mans weakness is another mans strength".

That's what makes this different from all other stock sites.  

Saffey.

[la-onda]

Metro, thanks for this info !!
applaud

[stocky]

Applaud metro. If Gold futures closes above 447 then we may see another run next week. At the moment they are at 451.40

[la-onda]

Metro, have you bought some of them?
Thanks again for this informative posting

[metro]

la-onda -

Yes I had many but I day trade often so as gold was pulling back I sold just to use that money some other things - I will buy back as soon as gold settles. The US$ is really at a support are so may have a little rally this week which may drop gold a bit since it is oversold.

I think gold will be higher at the end of the year and many of the stocks shown here will be good plays to hold a few months based on the charts of the dollar and gold and the stocks.

If I had no current use for my money I would have just kept many of these stocks and ride them through gyrations but I like to buy them on pull backs when I can to make a bit extra money.

Silver has not moved yet and they do not need to move together but it would signify a stronger metals market when silver can also rally. Palladium is the other metal I trade and in the USA stocks there are 2 main ones SWC and PAL

PAL had a nice break out and ran up above the top Bollinger band while RSI was above 70 so IMO a sell signal since the metal Palladium had not moved much. Anyway it has now gone back below a break out line but above another one so could be bought with a stop below the lower line - note how the MACD ws very strong on the move - a good thing to look for.



SWC had resistance at the 200-day EMA and fell back to support so also is at a place that could be bought with stop below support.



You need to keep and eye on Palladium prices - the chart does not look so good and the RSI has not returned to 30 but the price has returned to the trend line on Friday and is at the lower Bollinger band so worth watching for a bounce. If PAL and SWC hold they may   also be good longer tern holds as long as the Palladium price confirms the move. Buying as close as you can to support can be good in that if it breaks you sell and wait for another set up --- of course you risk an intra day shake out and being stopped out followed by a strong rally but money management is important to staying in the game. Better to miss some of a profit then to take a bigger loss.

BTW often gold stocks that start out higher at market open will give a pullback not to long after the open and the strength shown on the buying after the pullback can be a good guide to how strong the move may be. It just takes experience to judge that.


Here is the Palladium chart

[la-onda]

Metro, thanks again for this detailed answer and the additional information.

I have decided to have GBN & PMU now on my radar (started a small position already);
updated charts for other board members:

[la-onda]

updated PMU chart:
http://stockcharts.com/def/servlet/SC.web?c=pmu,uu[g,a]dhclyiay[dd][pb20!b50!b200][vc60][iup14,3,3!uh39,3!ul14!ua12,26,9!lb14!lc20][J38159858,Y]&listNum=13

[la-onda]

additional PMU information:
http://www.pacrim-mining.com/s/FreqAskedQuestions.asp

Q: Does Pacific Rim need to raise money?

A: Pacific Rim is in a relatively unique position, being one of the few exploration companies with cash flow. Pacific Rim utilizes cash flow from gold production at its 49% owned Denton-Rawhide residual leach gold operation in Nevada to conduct its exploration activities, primarily at the El Dorado gold project in El Salvador, and to pay for general and administrative expenses. Pacific Rim is one of the few companies that have not financed in recent years, operating solely on cash flow and sparing shareholders' dilution.

Pacific Rim anticipates continuing to fund its exploration initiatives and G&A from cash flow for the foreseeable future, and is not contemplating a financing at this time. Readers are referred to this FAQ for a discussion of potential mine financing options for the El Dorado gold project.

updated chart for PMU & GBN:

[la-onda]

PMU NEWS update:

Pacific Rim Mining Corp.: Andacollo Extension Payment Received
Thursday August 18, 5:55 pm ET


VANCOUVER, British Columbia--(BUSINESS WIRE)--Aug. 18, 2005--Pacific Rim Mining Corp. ("Pacific Rim") (AMEX:PMU - News; TSX:PMU - News) has been informed by Trend Mining Company ("Trend") of its intent to extend the due diligence period related to its proposed purchase of Pacific Rim's Andacollo gold mine in Chile, as permitted by an amendment to the terms of the June 20, 2005 Letter of Intent signed by both companies. Pacific Rim has received from Trend a further US $300,000 to extend Trend's exclusive due diligence period for an additional 30 days. Under the amended Letter of Intent, Trend's remaining payments for the Andacollo asset will consist of: US $2.1 million upon closing; US $1 million within 12 months of closing and US $1.4 million within 24 months of closing, for a total purchase price of US $5.4 million.

[metro]

Gold still had far to many commercial shorts from last week (and they are usualy correct) to play the stocks in general but some of course can move on their own.

I forgot to re-post the EGO chart as it trades in its own channel and yesterday hit the bottom again - one to watch for this nice behavior.

[metro]

la-onda - on PMU a break with good volume above the trend would be my way to play this one but as of last week the commercial traders were still very short gold so I am just not even considering gold stocks until they start to cover some of those contracts.

PMU seems to have support at 0.55 so if I owned it I would sell if that support breaks