Gold Stocks With Tailwinds?

Is it time to consider gold stocks?

The price of gold has just moved above its 200-day moving average. Numerous articles are starting to appear declaring gold's time may have come, although articles like that have been popping up for a couple of years now.

GLD, the SPDR Gold Trust ETF, is up 10.6% from the late December low. The volume pattern on GLD's daily chart suggests accumulation.

How about gold stocks? Barrick Gold (ABX) has just reached August 2013 highs, although ABX is still down 41% from the January 2,2013 open.

Seasonally, how have the gold stocks performed this time of year? Newmont (NEM), one of the most actively traded gold stocks, shows a net 0.4% gain over the next 11 weeks, with gaining years evenly matching losing years. There certainly is no historical track record suggesting it is time to bet on Newmont (in either direction).

Yamana Gold (AUY) used to be my favorite gold stock for both speculation and covered call writing. Like GLD, the ETF, AUY set a double bottom in late 2013 and has since been working its way upwards. AUY just closed above November 2013 highs.

The problem is AUY's track record for this time of year. AUY has declined an average of 12% over the next 12 weeks, with losses in 15 out of 18 years. That's a pretty negative track record.

I like to use seasonals to find ‘tailwinds' to trades. But for major gold stocks, there is no evidence of a recurring pickup in prices this time of year. If gold stocks move, it'll be purely because something fundamental has changed and big money is coming in – this year.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, type in www.markettamer.com/seasonal-forecaster

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2014 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.

Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.

As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.

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