GLD Could be Your Golden Ticket

By Sam Collins,

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SPDR Gold Shares (NYSE: GLD ) - This exchange-traded fund (ETF) seeks to replicate the price of gold bullion net of expenses.

GLD had a terrific run from $80 a year ago to the recent new breakout high at over $153. But profit-taking and a stronger U.S. dollar resulted in a pullback to its 50-day moving average. At just under that line, GLD formed the base of a trading rectangle and reversed sharply from it last week, and closed above its 50-day moving average yesterday. This reversal triggered a buy signal from the slow stochastic.

It is likely that this latest round of buying will lead to a breakout through the resistance line of the rectangle and a new high between $155 and $160.

Since commodity ETFs may be subject to greater volatility than traditional ETFs, they may not be suitable for all investors. Traders should enter stop-loss orders to protect against large losses.

Trade of the Day - SPDR Gold Shares (NYSE: GLD)

Trade of the Day Chart Key

See Sam Collins' Daily Market Outlook: A Correction May Still be in the Works See Serge Berger's Daily Market Outlook: The Longer the Rally Lasts, the Harder Stocks Will Fall See Serge Berger's Trade of the Day: Whole Foods Looks Like a Healthy Buy

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas , Stocks
Referenced Stocks: ETF , GLD

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