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Robert Edwards
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Contrarian daytrading technician who specializes in locating high probability short term trades while predicting price movement directions with over 85% accuracy. Most of my trading involves either extremely short term micro scalping of stocks or commodities (using 1 minute bar charts), or swing... More
  • A Little Late To Buy DUST Aggressively, Still Too Soon To Buy NUGT 4 comments
    Sep 13, 2013 6:11 AM | about stocks: NUGT, DUST, GLD, GDX

    (click to enlarge)

    This morning's action in DUST is not shown on the chart as this only shows the price action through the close of yesterday, Sept. 12, 2013, But we are going to gap up for the 3rd time today. Today could be an exhaustion gap of the current bull run, or we could see a further gap up on Monday. But in any case, the price target I predicted last week of $35 to $37 was too conservative. If you missed it, you can read my previous articles here, here and here.

    Just Play Small And You Can Have A Ball!

    If you failed to buy in before now, it is a bit late to try an establish a position trade in DUST as it has already run up nearly 100% from the $20 low hit less than 2 weeks ago. However, one can still day trade 100 to 200 shares and make some nice pocket change if you are careful. My goal is to make $200 per day playing 100 to 200 shares of DUST at a time. The way this triple inverse gold mining ETF is moving lately, my conservative goal has been easily attainable. For a good article on how many shares one should be trading based on your account size, please click here. Always remember when playing DUST or NUGT, "Just Play Small, And You Can Have A Ball!"

    The Consensus Is DUST Should Top Today Or Monday

    Looking at the above chart, you will notice that on June 20th we gapped above $60 in DUST. That trading day corresponds to the action this week on September 10th when we gapped above $30. Next in June we did the flagpole pattern I described in my previous article, that was repeated now on Sept. 11th. Then on June 24th we gapped to $70, which corresponds to yesterday's gap up above $34 and gets us to our close above $36. If we should repeat June 25th action today we would have a consolidation day, but based on the $25 sell off overnight in gold down to $1305 and test of important support at $1300, we are going to easily gap above $38 today and could easily hit $40. In June there was a final blow-off gap to a high of $83.25, and I would not be surprised if we repeat that now with a blow-off gap on Monday that gets us to a price approaching $45.

    GDX Closed $25.29 And Has Support At $24 & $23

    We can look at the following chart of GDX to see where GDX might find support and end the current rally in DUST.

    (click to enlarge)

    You can see that support in GDX comes in at 24 and 23.

    If GDX stops falling at 24 then that is a drop of 5.1% which multiplied by 3, you get 15.3% further rally in DUST from the close today of 36.28 equals 41.83. If you calculate NUGT closed today 54.08 then it could drop 15.3% to 45.80.

    If GDX falls to 23 then that is another drop of about 4% which is another 12% up and down in DUST & NUGT from the prices I just predicted, so DUST would be 46.85 and NUGT would be 40.30.

    So you DUST traders, we are likely to stop the current rally between $42 and $47! Not bad when one considers that last week we were trading $25 to $29 and the week before we bottomed at $20!

    If You Buy NUGT At 50, You Might Suffer Through A Dip To 40

    So if you buy NUGT at 50 or lower, you might have to carry through a short term bottom of 47 or maybe 40, if you get in too soon. That is your risk based on GDX stopping at 24 or 23. Problem is, once these things start going one way the momentum can carry it farther than anyone predicts so be careful out there. In case you were wondering, here is a chart of NUGT

    (click to enlarge)

    Disclosure: I am long DUST.

    Stocks: NUGT, DUST, GLD, GDX
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Comments (4)
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  • Robert Edwards
    , contributor
    Comments (569) | Send Message
     
    Author’s reply » After two straight nights buying DUST aggressively on weakness in the aftermarket, and cashing out big the next day, I am finally flat a couple hours before the close of trading on Friday, Sept. 13, 2013. Next week I will be starting to buy NUGT on dips and only playing DUST for a quick scalp. Time to switch sides from DUST to NUGT is fast approaching. I will start easing into NUGT next week. Will make stocktalk posting for NUGT and then comment during day for running commentary of trading ideas.
    13 Sep 2013, 03:17 PM Reply Like
  • rodh7858
    , contributor
    Comments (136) | Send Message
     
    Thanks.
    13 Sep 2013, 05:02 PM Reply Like
  • tanriseven
    , contributor
    Comments (9) | Send Message
     
    I wish I can watch you trade live
    13 Sep 2013, 11:44 PM Reply Like
  • Lefty6x6
    , contributor
    Comments (55) | Send Message
     
    Ladies and Gentlemen, Mr. Robert Edwards - !
    14 Sep 2013, 06:06 PM Reply Like
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