Gentlemen, Start Your Engines!
I don’t generally do the intentionally provocative headline unless I’m trying to get your attention. And usually, I’m only trying to get your serious attention on the breaking political stuff. Very rarely do I pound the table on the market picks, unless I think we’ve entered a special “sweet zone” where we should collectively be taking advantage.
I believe this may be one of those times.
Let’s start with the commodity gold ($GOLD) weekly chart to show where it all began last week. I’m going to use the weeklies on all of these mostly to show the consolidations and the breakouts, and also to show how much room this thing still has to run before it gets RSI oversold. The gold weekly broke out of a consolidation flag that has been forming since September:
Now let’s look at silver, via the double silver ETF $AGQ, where we are back above that first resistance support line after undergoing an RSI-divergence (again) since September:
Last, let’s have a look at the gold bug index $HUI which shows us what’s going on with the major miners. Note that we’ve been in a consolidating channel for almost 17 months now, and we have taken off from the most recent bottoming with a strong weekly push:
I think that failed channel breakout from early September that has now consolidated into a flag pattern within the larger horizontal channel means that Baby $HUI is readying itself for a final breakout to the next level. Again, the abundant room left in the RSI and the other stochastics also give me some comfort here.
Now there’s a lot of room to make money in a cornucopia of names here, and– again– I’m showing you the weeklies to indicate that there’s time left for you here, especially in the traditionally strong names like AG, EXK, SLW, ANV, AUY, and even the larger players like GG and ABX. If you are not in any of them yet, then I would certainly make sure I had a position in SIL, GDX and GDXJ in order to cover the industry as completely as possible.
As for my favorites right now, I’ll give you a couple that I think you can buy “rain or shine” tomorrow because they’ve got so much “mo” behind them right now. The first is my long time favorite and Jacksonian, RGLD:
Again, there’s just so much power in that lift off the floor. You can wait, of course, to see if we break out of that triangle, but I think that volume and price action from last week are indicating that we may get out of it as early as this week.
My other “immediate” pick is Alexco Resource Co (AXU), which I have not mentioned in at least a year. Alexco, however is betraying a consolidation pattern almost as toothsome as the one AUY broke out of late last year. As you can see, this one’s bumping it’s head on the hypotenuse ceiling of that triangle. I think with anything close to the volume of last week, that ceiling is history.
Enjoy, and partake, if you like. Despite the temporary winds against us right now, I don’t think we’ve seen an opportunity like this in almost 18 months. Make hay while that sun still shines.
Best to you all.