Sunday, September 13, 2009

Buy on the dip

As most of our readers know we are primarily break-out traders. However when it comes to certain type of stocks we prefer to buy the dip rather than the rip. Note on the following chart of the gold miners -- after the initial break-out support was bought but also when investors got excited and the metal became extended in price the opening gap was sold.

We see this happening also on an intraday basis and are buying gold on dips to ascending EMAs.

Right now the best action is in gold stocks (not in terms of the stocks going up every day but rather obeying technical rules and bouncing where they are supposed to on a daily and intraday basis). Until this changes, whenever that may be, gold stocks will be our focus.