Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Shares of Streettracks Gold (NYSE: GLD) Gap Higher

|Includes: SPDR Gold Trust ETF (GLD)

May 10, 2011

Shares of Streettracks Gold (NYSE: GLD) moved higher on Monday, May 9, after last week’s 7% selloff. Is a new rally ahead?

Typically corrections chart out a three wave pattern. If GLD is going to follow the same path it still has another wave down to lower lows.

That said; gold is an emotional trade and if traders suspect the worst is over, GLD could just continue higher.

One way to take advantage of a potential rally is to purchase GLD at current levels, around $ 147.50 a share, and place a sell stop just beneath the prior correction lows at $142.50.

If those lows are taken out the third wave down is probably in progress. But if we do have higher highs ahead, the $142.50 stop is a limited risk trade.

The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy does not hold a position in Streettracks Gold.