PowerRatings and Golden Pullbacks: DROOY, GLD, IAU, AU
Stocks rallied into the close on Wednesday, taking advantage of oversold conditions left over from the previous sessions.
Looking back on the stocks last mentioned in the 5 PowerRatings Stocks for the Next 5 Days column, what is notable is the fact that the gold stocks and ETFs remain under pressure. Three of the names — DRDGold Ltd.
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PowerRating), SPDR Gold Shares ETF
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PowerRating) and iShares Comex Gold Trust ETF
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PowerRating) — all closed lower on an open to close basis, but were up from the previous day’s close.
As such we should not be surprised if these gold names continue to move lower in the near term, as the up opens in the above were all greeted with fairly energetic selling. PowerRatings upgrades in these stocks — as well as declining 2-period RSIs — will provide timing clues for traders looking for entries into these stocks.
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The pharmaceutical in the last column, Cadence Pharmaceuticals
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PowerRating), on the other hand, closed higher by nearly 5% on Wednesday. Add to that the fact that the stock also closed above its 5-day moving average and traders are witnessing the kind of strength in CADX that screams for profit-taking.
Looking a little further back, we see that the stocks from Monday have also performed well. Both Family Dollar
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PowerRating) and Dollar Tree
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PowerRating), stocks featured in “PowerRatings: Trading Recession Stocks and Short ETFs†have advanced significantly since the beginning of the week. Traders in these stocks should consider taking profits, as well.
We also see that the short ETFs from Monday’s article also did well during the selling that has characterized the balance of the week. Although both were lower on Wednesday, Tuesday’s close saw both the ProShares UltraShort Consumer Goods ETF
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PowerRating) and the ProShares UltraShort Industrials ETF
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PowerRating) end the session significantly higher. AngloGold Ashanti
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PowerRating), also from Monday’s report, has behaved much like the gold names above, still under selling pressure and likely to move lower in the short term.
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