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Gold Stocks on a Daily, Weekly & Monthly Buy Signal – Video

Gold is back in the spot light as it flirts with the $1000 per ounce level. This closely watched commodity looks as thought it will rocket higher because of the multiple trading time frames indicating breakouts.

I mainly focus is on trading the daily chart but I always refer back to the longer time frames which are the weekly and monthly charts. Knowing the momentum and trend on these long term trading charts allow me to identify the strength of the rallies and sell offs on the daily chart. I use this analysis for determining how large of a position to take, and where to place profit targets and stop loss levels.

Trading gold stocks does provide explosive opportunities when the price of gold moves. The past couple years I have only been focusing on trading gold to the long side because the overall long term trend is up. Trading with the longer term trend always improves the odds of winning the trade. I will short GLD or GDX funds for an intraday trade using my simple Kitco gold overlay Day Trading Strategy. I have posted this strategy a couple of times on the internet, if you want to read more about it.

Below is my analysis explaining the price action of gold stocks on the daily, weekly and monthly charts. I also a listed the US and Canadian funds which I trade.

HUI Gold Stocks Index – Daily Chart – Short Term
The daily chart of the HUI clearly shows buy and sell signals, which were generated in the past 2 months. Using resistance trend lines for breakout levels is very important. I also use pivot lows to draw and connect my support trend lines, which allow me to calculate down side risk and buy signals. The recent breakout is very strong and that is because the weekly and monthly charts are showing a breakout to the upside triggering longer term traders/investors to buy.

Daily chart buy and sell signals are for short term trades which last between 2-20 trading days. My focus is to lock in 1-5% gains but in a strong trend I can pocket 10-20% return in a short period of time.

Gold Stocks Newsletter

Gold Stocks Newsletter

HUI Gold Stocks Index – Weekly Chart – Intermediate Term
Weekly chart patterns and breakouts provide a much larger move in general so watching this chart is crucial for long term success. Following the weekly chart goes for trading every investment vehicle whether you are trading stocks, futures, FOREX etc…

This chart generated a buy signal in December of 2008, which we took advantage of. And just 2 weeks ago it gave us another buy signal. Again using my simple trading strategy which involves trend lines and the MACD momentum indicator, we are able to establish clear buy and sell signals.

Gold Stocks Trading

Gold Stocks Trading

HUI Gold Stocks Index – Monthly Chart – Long Term
Long term investors will use the monthly chart for timing their buy and sell signals because once the momentum has shifted direction it tends to last for several months if not years. I do not focus on trading these long term signals but I use them to help me know the momentum (power) of the next possible breakout. This also helps me in deciding whether to scale out on rallies with some of my position locking in some profit and buying back on dips, while leaving a core position incase the price continues to rally.

The monthly chart of the HUI shows a breakout this month and if the price can hold until Oct we will have a complete long term buy signal. I use the MACD for momentum and the HUI:GLD ratio to confirm the breakout which puts the odds more in my favor.

Gold Stocks Newsletter

Gold Stocks Newsletter

Precious Metals Funds for Trading Gold and Silver Moves – Daily Chart
Here is a list of the precious metals funds I trade on a regular basis. I trade both US and Canadian funds. Because I am based in Canada I focus on Canadian gold stocks and gold funds when there are intermediate/long term signals which I trade in my retirement account.

The funds I trade are GLD (gold bullion), GDX (gold miner stocks), SLV (Silver Bullion), XGD.TO (Canadian Gold Stocks), CEF/A.TO (Canadian Gold & Silver Bullion). If you look at a comparison chart you will see some funds provide much larger moves than others. In general I like to own a bullion fund and a precious metal stock fund so that I get the best of both worlds.

Gold Trading Investments GLD, SLV, HUI, GDX

Gold Trading Investments GLD, SLV, HUI, GDX

My Gold Stocks Newsletter Trading Conclusion:
In short, Gold and gold stocks are on fire. The next 13 trading days are very important for gold as it battles to breakout above the $1000 – $1033 level which is the 2008 high. With gold trading at this MAJOR resistance level also known as a “Pivot Point”, the risk level is higher for traders. The odds are pointing to higher prices but we must recognize that price action becomes volatile and fast moving. We could see the price breakout and rally to the $1500 level within months which is what are currently positioned for. But we must realize that gold could create a double top and sell off very quickly which is why we have stops in place to protect us.

So those of you who are long be sure to lock in some profit and be ready for some wild price action in the coming weeks.

If you would like to receive these Free Weekly Reports please Opt-in to my newsletter at: www.GoldAndOilGuy.com

Chris Vermeulen

Gold & Silver Technical Trading Charts

I hope everyone enjoyed the weekend!

Gold is once again the hot commodity, as the price rises to the $1000 per ounce level. This $1000 – $1033 is a technical pivot point for gold. One of two things is going to take place in the coming weeks.

If the price of gold can move above $1033 then I expect to see a lot of traders and investors buying gold, as they panic into the position because they do not want to miss another gold rally. Also traders who are short gold will be forced to cover their positions and this will send the price of gold rocketing higher towards the $1200- $1500 area.

On the other hand, if gold fails to break higher, we will see a swift sell off, as everyone sells their position.

HUI – Gold Stocks Index – Monthly
I like to use this chart for timing longer-term gold investments. Gold stocks tend to lead the price of gold on a percentage gain/loss basis and so far this month, gold stocks are on fire. This bodes well for gold.

When I see breakouts on this monthly chart, I tend to take larger positions in gold and gold stocks because rallies tend to last 2-6 months. I like to take profits, as the price rises, so that I am locking in gains while still taking part in the continuing move.

The gold stocks (Golden Rockets) we purchased 2 months ago are now up 45% and 100% from our entry point and they still look very strong. Taking some money off the table is a great idea. Gold could go either way fast and it’s better to sell some of the position to lock in profits and let the balance of the trade run. Too many traders swing for a home run and never take profits on winning positions. Winners eventually turn into losers if you hold on to them long enough. Money management is the key to successful trades.

Gold Stocks Newsletter

Gold Stocks Newsletter

Price of Gold – Gold Bullion – Weekly Chart
This chart clearly shows the breakout last week from the pennant pattern. The price of gold is nearing resistance. This week will be exciting as gold tries to breakout.

Gold Bullion Newsletter

Gold Bullion Newsletter

Price of Silver – Silver Bullion – Weekly Chart
Silver is not as close to the 2008 high like gold is, but is still performing well. Silver is trading at a short-term resistance level and I expect to see higher prices this week.

Silver Bullion Newsletter

Silver Bullion Newsletter

Silver and Gold Newsletter Conclusion:
Gold and silver are starting to run higher and with all the media coverage I expect to see money moving into precious metals for a couple months. This is an exciting time for precious metal investors and a lot of money is going to be changing hands once these metals pick a direction and start moving.

I will be sending out my energy report for oil and natural gas tomorrow. If you would like to receive my trading reports please visit my website at: www.GoldAndOilGuy.com

Chris Vermeulen