Tuesday, June 5, 2012

Sold GSS @ $1.24 - GDX Near-Term Thoughts

I was looking for a gap fill of $1.24 on my position of Golden Star Resources (GSS) to conclude that round trip trade and today I received that price for my shares and said bye-bye. Since late March I have managed to trade for a gain of 78% and have narrowed the horrific 97.3% loss I suffered on TVIX in mid-March to just 15%. Thank you gold bull!

My TSI Trading record has been updated.

This chart is a 60 minute of GSS as it looked just after I sold my shares. You can see that the True Strength Index (TSI) indicator gave me an excellent entry at $1.06. The TSI still looks favorable for GSS if one owns this stock and is inclined to hold for longer than a short term trade, I see every reason in the world to continue holding it.

I made a quick daily chart of Market Vectors Gold Miners ETF (GDX) which is shown below. The TSI is reading 0.60 which is fairly high but not necessarily a concern. 

What caught my eye was the favorable close above the 50 dma for the past couple sessions, and the proximity of today's close to the lower boundary trend line of the gigantic megaphone pattern that began over 18 months ago. 

I would instinctively guess that this will be a point of resistance and that a pullback may be in the cards in the short term.

A pull back to the 50 dma at around $45.50 would not be surprising nor would a pull back near the midpoint consolidation area of what appears to be a T1 continuation pattern be surprising ($44.00). So, we'll just have to wait and see.

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