The Best Gold Miners Are Still in Bull Markets
With famous traders like Dennis Gartman talking about the end of the gold bull market, the gallop toward the exits continues for a fourth day. But with markets increasingly oversold in the short-term, there may be opportunity for traders looking to buy weakness in what bull market gold has left behind.
There are a number of gold mining stocks that while much lower than they were a week ago, remain above their 200-day moving averages. This means that they are still in technically uptrending markets. And typically, pullbacks in such markets have proven excellent short-term opportunities to buy.
Up fractionally after pulling back for three days in a row are shares of ^NEM^. The stock has traded in oversold territory twice over the past four sessions and has a short-term positive edge of more than 1%. Shares of NEM have been trading in bull market territory consistently since mid-August.
An even more oversold mining stock trading in bull market territory is ^AUY^. Shares of Yamana Gold have been in correction mode not just for the last four days in a row, but for eight out of the last ten sessions, as well.
Thursday marked the fourth day in a row the stock finished oversold and, as traders might expect, AUY has a sizable, short-term positive edge of more than 2% ahead of trading on Friday.
Also down four in a row heading into the final trading day of the week is ^RGLD^, which finished down by more than 2% on Thursday. Royal Gold has finished three times in a row at oversold levels, and is due for a bounce in the next few days. A similar pair of closes in oversold territory a month ago in the stock led to a rally of more than 2% one day later and gains of more than 8% six days later.
Traders and active investors who are more interested in a basket of gold mining stocks to diversify away single stock risk have the opportunity to buy a very oversold ^GDX^. GDX has a positive edge of nearly two and a half percent heading into Friday’s session, after closing lower for a fourth day in a row and losing more than 1% on Friday.
Note that GDX is trading below its 200-day moving average, as are the majority of gold miners not listed here.
The stocks and ETFs in today’s report were drawn from the data and research available through The Machine. To find out more, click here.
David Penn is Editor in Chief of TradingMarkets.com