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Don't Miss Golden Opportunity in GDX

by Sam Collins 10/05/09

Market Vectors Gold Miners ETF (GDX) -- This exchange-traded fund (ETF), which attempts to replicate the price and yield performance of the Amex Gold Miners Index, is in a bull market with both the long-term support line and the 200-day moving average at $37.

GDX Chart

Chart Legend

On Aug. 19, at $37.46, I said, "This seems to be an attractive entry point for this ETF, which formed a very bullish cup-and-handle formation and, in March, a gold cross. The target for this investment is $50 to $55. Place a stop-loss at $33."

On Sept. 16, GDX hit a new high at $48 and then succumbed to profit-taking.

The Oct. 2 close is near to the first major support, the 50-day moving average (blue line) at $41.75, so first-time buyers may eye this area for a half position.

Volume on the recent pullback is high but declining, indicating that a climax has or is about to occur. A full position could be initiated below $40.

The trading target remains unchanged at $50 to $55.

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