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Jeb Handwerger
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Gold Stock Trades Editor Jeb Handwerger is a highly sought-after stock analyst syndicated internationally and known throughout the financial industry for his accurate and timely analysis of the equities markets, particularly the metals and mining sector. Subscribe to his FREE Newsletter right... More
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  • Three Failed Attempts to Regain 200 Day Moving Average, Buyers Beware!

    In baseball if you swing and miss three times then you are out.  On a chart if you see three failed attempts to break resistance…get out or short.

    Each time the SP5oo tries to regain the 200 day moving average it fails and it is immediately hit with selling.  Sellers are in control and the market is still in correction mode.


    Today Moody’s downgraded Greece’s debt which caused the market to give back early leads.  The chart shows a picture of a move up to the 200 day on low volume.  This means there is very little buying going on.  In order for me to gain confidence in the markets I need to see a break through major resistance levels with conviction and that moment is not apparent yet.

    Quite contrary three failed attempts to regain major support has failed.  This causes me great concern because in a bull market the 200 day acts as support.  In this case it is acting as resistance, which is typical of bear markets..buyers beware!

     

    Jun 15 12:49 AM | Link | Comment!
  • Is Gold In A Bubble? Classic Cup and Handle Pattern.

    On the front page of all the media outlets is the question if gold is in a bubble. I ride bubbles and look for beginning signs of bubbles. Bubbles are irrational, but there is an old saying that markets are irrational a lot longer than one can stay solvent.

    I believe gold is nowhere near a bubble top and believe now is the time to profit on the next major asset class ready to run through finding the strongest mining stocks in the sector. I use relative strength to find those companies.

    Gold is in a classic cup and handle pattern. The cup and handle pattern has historically led to major market moves.
     


    You can see by the graph the major breakout from the six month saucer on excellent volume. Notice how the volume dries up on the handle. Now I expect a major breakout and a run to $136 on GLD or $1375 an ounce.

    Compared to other bubbles gold appears flat.


    This a chart of the oil index verse the gold and silver index. Notice the run in oil before the credit collapse. This run lasted almost 5 years before it topped. Meanwhile for the past 15 years the XAU has been relatively flat and yet it has had a nice run we have not seen the run up like other asset class bubbles.

    I believe there are signs that we may be moving into a peak gold area and would not be surprised if there is a global rush to gold as investors lose faith in fiat currencies.

    The recent collapse of the euro only preludes what will eventually happen with the dollar and treasuries. Now many people have run from the Euro to dollars, but I believe that is temporary. Now is the time, before the masses rush in, to buy gold and specifically the strongest mining shares which I highlight here. This is not the time to be bottom fishing other markets. I believe to stick to strength. This chart above gives me the confidence to know that we have not entered bubble territory yet.

     



    Disclosure: Long NGD and UXG
    Jun 11 1:24 PM | Link | Comment!
  • Buy U.S. Gold (UXG) Price Moving Higher After Cup and Handle Breakout

    The cup and handle breakout is a classic pattern which stock market traders search for constantly. A cup and handle pattern means that the stock has made a consolidation where many of the weaker holders sell their shares. Then as the stock breaks into new highs a handle is formed. It is formed because many investors who bought at the previous high are now trying to get back the capital that was initially invested at the previous high. Then a handle is formed. A handle should move sideways or slightly down so investors who bought at the previous high can get back their capital. Once this handle is completed the stock has very little selling pressure and buyers now gain control and push the stock into new highs. Many times the percentage gains are impressive.

    Sometimes a stock forms a triangular pennant after a breakout as in the case of U.S. Gold (NYSE:UXG). These triangular pattern in a handle are bullish and provide investors an opportunity to get in before a major run.

    My ideal buy point is after the breakout of the cup when the handle pulls back to key support. Right now is a good opportunity to add shares before a breakout at $4.31.

    There are four upcoming events that could make this stock move.

    1) 20 drilled hole results from El Gallo in 2 weeks.

    2) El Gallo Initial Resource Estimate in 4 weeks.

    3)Additional Results From Regional Exploration in 6 weeks.

    4)El Gallo Economic Assessment by year end.

    I am excited by the results coming out in mid July from the regional exploration. UXG invested a lot into Mexico this year knowing that this land package could contain a massive amount of silver. I am excited for the next few weeks both from a technical and fundamental perspective.



    Disclosure: Long UXG
    Jun 10 4:29 PM | Link | Comment!
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