Tags: Gold | industrial | CAT | stock

Is Gold Going to Tank?

By    |   Monday, 01 Jun 2015 11:18 AM

Todd Gordon of tradinganalysis.com offered a recommendation for SPDR Gold Trust (GLD), the exchange-traded fund for gold futures, based first on a log chart of monthly prices that shows an upward trend dating back to 2002 that he believes has broken down, so that now is a time to short gold. On the daily chart of the GLD, Gordon has identified a near-term double top, so he would establish a put spread of 115/110 of July for $1.90, with a stop at $116.25.

Dan Nathan, co-founder and editor of RiskReversal.com, and the other CNBC Options Action traders singled out the industrial sector as a trouble spot due to the behavior of commodity prices, a strong dollar and what they believe is a likely Federal Reserve action to raise interest rates, what Nathan sees as "a very economically sensitive sector that doesn't act particularly well." Melissa Lee remarked, "You guys are so down on this entire space; are there no signs of life?" Undeterred, Nation pointed to $4 billion in stock buybacks by Caterpillar (CAT) "that fueled a massive rally," showing a chart dating from January 2014 that shows "the stock has cratered, a nasty-looking downtrend." He thinks higher rates would inhibit further stock buybacks, especially if commodities fail to rally. Carter Braxton Worth agrees that the chart depicts "a bad situation." Nathan recommends that if there is a bounce in CAT this week, he would buy the August 85/77 put spread for $2.50, looking for the spread to widen to $5 if the stock drops 9 percent.

In the next clip, John Ogg, editor of 24/7 Wall Street, recommended Teva Pharmaceuticals (TEVA), Cisco Systems (CSCO) and Disney (DIS) as good choices for the next decade. "It's not like we're trying to pick the next Apple here." This writer sees considerable volatility ahead, including at least one episode of the ongoing, permanent financial crisis during the next decade, so questions the basic premise. Of the group, Disney probably makes the most convincing case.

Finally, technician Rich Ross of Evercore ISI expressed "high hopes" for the tech stock rally in the Nasdaq, which has outperformed the S&P, to continue this week, based on "a very bullish ascending triangle, although resistance "remains intact" at 5,100. Ross predicts a breakout from the triangle above 5,100, setting the stage for "the next leg up in technology."

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Robert-Feinberg
Todd Gordon of tradinganalysis.com offered a recommendation for SPDR Gold Trust (GLD), the exchange-traded fund for gold futures, based first on a log chart of monthly prices that shows an upward trend dating back to 2002 that he believes has broken down.
Gold, industrial, CAT, stock
392
2015-18-01
Monday, 01 Jun 2015 11:18 AM
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