Thursday , 23 November 2017


Finally the Final Bottom in Gold Stocks Is Coming – Finally!

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The mining stocks have been a disaster if you’ve invested in the average fund, GDX or GDXJ and if you’ve invested in the wrong stocks, they’ve been a total disaster and you will now hate the sector forever. We’ve certainly been surprised by this protracted struggle. In my articles you’ve heard me talk about accumulating on weakness, buying support, being patient and waiting for better opportunities. Folks, this next week is one of those opportunities. The gold stocks are setting up similarly to the bottom in 2005 [and, as such,] are set to test a major bottom and could be on the cusp of a major reversal.  Let me explain. Words: 438; Charts: 3

So writes Jordan Roy-Byrne, CMT (www.thedailygold.com) in edited excerpts from his  original article* entitled Final Bottom in Gold Stocks Coming.

This article is presented compliments of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Roy-Byrne goes on to say in further edited excerpts:

Gold Stock Performance in 2004 and 2005

The gold stocks made a major double bottom in 2004 and 2005. The first bottom occurred in 2004 and the second in 2005. Interestingly, the 2004 bottom was its own double bottom…[in] that the gold stocks rallied significantly for several months following before eventually giving it all back. Note the circles on the chart below as they compare to the current situation.

Below is a chart of the HUI in 2004-2005 with the HUI/Gold ratio plotted at the bottom.

Gold Stock Performance in 2012

In 2012 the HUI formed a small double bottom and then rallied strongly for a few months (like in 2004). Similar to 2005, the market has given all of that back and in the process the HUI/Gold ratio broke to a new low. The question now is will the HUI form a major rebound similar to the one in May 2005 and cement a long-term double bottom? Correlation is not causation but we should be aware of the potential for a strong rebound.

Gold Stock Performance Trend

Aside from the 2012 double bottom support, there is major trendline support around the 350 area. In the short-term, a move below the May 2012 low would constitute a major breakdown. However, it could be a test of the bull trendline and induce a bear trap and major reversal. On a very long-term chart, the difference between 375 and 350 is barely noticeable. The chart below shows the trendline connecting the 2000 and 2008 lows.

How to Play 2013 Gold Stock Performance

One should buy when the sector becomes extremely oversold on a very short-term basis. Look for a bad day followed by a gap down the next day which produces big losses intraday. This is the type of action that precedes bottoms in the mining stocks….Look for stocks with strong fundamentals which have held up well in recent days and weeks. Those stocks will produce good rebounds.

 Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.

* http://thedailygold.com/final-bottom-in-gold-stocks-coming/ (If you’d be interested in professional guidance in uncovering the producers and explorers poised for big gains then we invite you to learn more about our premium service; Written by Jordan Roy-Byrne, CMT; Jordan (at) TheDailyGold (dot) com ; Copyright  © 2013 The Daily Gold)

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