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Play Editor's Note: My market bias remains bearish but today's afternoon rebound really throws a wrench in our short-term trading strategies. Plus, a real bailout plan for ABK could spark some serious short covering and a real rally for equities. The next couple of days could be pivotal for the market.


New Long Plays

Gold Miner ETF - GDX - close: 52.75 change: -1.87 stop: 47.95

Company Description:
The GDX is the Market Vectors Gold Miners ETF or Exchange Traded Fund. This equity simulates the performance of the AMEX gold miners index.

Why We Like It:
Our market bias is bearish for stocks but gold, even amidst all the hype, continues to look strong. Why would we want to consider going long gold or the gold miners? A couple of good reasons are the U.S. dollar and investor fear. The more the U.S. dollar falls the more expensive gold gets. Plus, gold is traditionally a "safe haven" play as stocks get more volatile (a.k.a. go down). Now gold futures have natural, round-number resistance at $1,000/ounce and will probably pull back. We'd actually look for a short-term bullish trade in the GLD if it pulls back near $92.00 with a stop under $90.00 and a target in the $99-100 zone. However, this play is on the GDX or the gold miners. Right now the GDX looks short-term bearish. The GDX has just failed near resistance around $55.00 and produced a bearish engulfing candlestick pattern on strong volume. However, instead of shorting the GDX and fighting with potential support near $50.00 we're suggesting readers buy a dip. If the GDX slips under short-term support near $52.00 it's a quick and easy drop to $50.00. We are suggesting investors buy the GDX in the $50.50-50.00 zone. Our suggest stop loss is $47.95. More conservative traders could try a stop near $48.45 instead. We'll list two targets. Our short-term upside target will be $54.75-55.00. Our second, more aggressive target will be the $58.00-60.00 range. FYI: The Point & Figure chart for the GDX is sporting a bullish triangle breakout with a $79 target.

Picked on March xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume: 4.2 million
 

New Short Plays

None today.
 

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