Going for the Gold? Try Yamana Gold (AUY)

Gold, ultimately we’re going to get to a particular gold stock, but I wanted to go over gold. Over the last few days it really hasn’t gotten much attention because the whole Crimea thing is turning out to be much ado about nothing, at least from a market standpoint; the other stuff, don’t get me wrong I’m not minimizing the political aspect of that and the geopolitical aspect of that. However, unless somebody’s here by mistake, I guarantee that not one person is interested in hearing my view on geopolitics in this area, and that would be frankly, because I don’t know squat about it. I just know this, the markets no longer buying gold with the excuse that it’s a safe haven. It’s generally not a safe haven, gold didn’t really scream when the cannons started firing in Iraq. A lot of things that are said about gold just frankly don’t stand up to scrutiny. It’s kind of like economic theory; most of those theories are great in the classroom they just don’t work in the real world.

So with gold, just trade the chart, and here’s what we know: a lot of guys called the double bottom here, I wasn’t one of them because I just wanted to see how the stock traded; I wasn’t really interested in that, and I also recognized this downtrend. Okay, so now you look at this and now we’re getting more of a bullish configuration aren’t we, so we get a breakout above this trendline, above the 200-day moving average, and now a little kind of a pullback to this general area right here. Okay, so I’m looking at gold and I see the pullback and this looks like a really positive thing, this looks like a really good thing, so I’m looking around at different gold miners to trade. First of all let’s look at the gold mining stocks; they kind of look the same. How about the junior miners, they look kind of the same.

So I’m looking for a stock that I can trade and lo and behold Yamana Gold ( NYSE:AUY ); I LIKE this here, because we see that gold’s had a little pullback, and it looks like it’s getting a bounce. A lot of these gold stocks have been working really well, but the thing about Yamana Gold ( NYSE:AUY ) is, and it’s trading right along the 50-day moving average, its got the zigzags here, tracking right along support by the 200-day moving average, a little false breakout, a pullback this is a perfect setup, low-risk set up. You’re buying RIGHT here, like RIGHT here, you keep a stop just a little bit below the 50-day moving average and if the stock moves according to Hoyle, if it moves like we think it’s going to, this is going to start moving higher, you’re profitable in the trade and then you can basically remove your stop, because at least you’re making money, and you let the trade stand on its own. So I hope this helps. The 50-day moving average is crossing the 200 even better, so just keep an eye on this; this is going to work for you.