Can the gold sector's "toehold" turn into a "foothold"?

For gold-stock traders, this is an important question...

Over the past few months, a big potential trading idea has shaped up. Gold stocks, which are some of the market's most volatile securities, have become extremely oversold. Sentiment toward the sector is terrible... and gold stocks are incredibly cheap relative to the price of gold.

The gold-stock fund (NYSE: GDX) has fallen 35% from its September high. But note the recent action in the 18-month chart below. GDX has found a "toehold" in the $36 per share area. This is an important level. Should this toehold turn into a foothold, the gold sector will use it as a foundation… and spring higher from it.

– Brian Hunt

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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