Dan Mezick
01-09-2005, 08:18 PM
The price of gold has declined about 30 dollars in about 30 days.
Gold stocks have not been immune, and have been beat up pretty good.
The pre-eminent gold stock is NEM. It's the one the mutuals buy, and it's a proxy for the entire gold sector. It has huge volume and is widely held.
NEM has fallen from 50 to the 41 area and sits squarely on a multi-year trendline.
As of 1/9/2005 I like NEM in the 41 area with a (tight) protective stop in 2 points below, at 39.
If it violates the trendline, the loss is around 5%. If the price bounces from here the odds are good for a run past 50.
The entire gold sector has been very beat up of late. If you are a trend-following believer, NEM may be as low as it will be for some time, based on it's trendline.
On the negative side, the oscillators are not particularly healthly and any trade to the long side may be considered speculative at this time.
Most of the above also applies to PAAS, my favored stock in the Silver sector.
Chart of NEM (http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=nem&draw.x=0&draw.y=0)
Chart of PAAS (http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=PAAS&draw.x=0&draw.y=0)
You are responsible for your own 'due diligence'.
(You know that.)
Gold stocks have not been immune, and have been beat up pretty good.
The pre-eminent gold stock is NEM. It's the one the mutuals buy, and it's a proxy for the entire gold sector. It has huge volume and is widely held.
NEM has fallen from 50 to the 41 area and sits squarely on a multi-year trendline.
As of 1/9/2005 I like NEM in the 41 area with a (tight) protective stop in 2 points below, at 39.
If it violates the trendline, the loss is around 5%. If the price bounces from here the odds are good for a run past 50.
The entire gold sector has been very beat up of late. If you are a trend-following believer, NEM may be as low as it will be for some time, based on it's trendline.
On the negative side, the oscillators are not particularly healthly and any trade to the long side may be considered speculative at this time.
Most of the above also applies to PAAS, my favored stock in the Silver sector.
Chart of NEM (http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=nem&draw.x=0&draw.y=0)
Chart of PAAS (http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=PAAS&draw.x=0&draw.y=0)
You are responsible for your own 'due diligence'.
(You know that.)