Trade of the Day: Breakout Signals It’s Time to Buy GDX

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Market Vectors Gold Miners ETF (NYSEARCA:GDX) — This exchange-traded fund’s (ETF) objective is to replicate, before fees and expenses, the price and yield performance of the NYSE Arca Gold Miners Index. At least 80% of its holdings are in common stocks and depository receipts of gold mining companies. This includes large-cap gold miners, as well as small- and medium-sized companies and foreign miners.

The fund’s top 10 holdings are Goldcorp Inc. (USA) (NYSE:GG), Barrick Gold Corporation (USA) (NYSE:ABX), Newmont Mining Corp (NYSE:NEM), Newcrest Mining Limited (ADR) (OTCMKTS:NCMGY), Agnico Eagle Mines Ltd (USA) (NYSE:AEM), Silver Wheaton Corp. (USA) (NYSE:SLW), Franco-Nevada Corporation (TSE:FNV), Randgold Resources Ltd. (ADR) (NASDAQ:GOLD) and AngloGold Ashanti Limited (ADR) (NYSE:AU). In addition to this fund providing an excellent way to participate in the counter-cyclical precious metals mining industry, the list of top holdings may be reviewed for individual investment opportunities in the sector.

GDX is threatening to break above a resistance line that starts with a breakdown in October at just under $20. It has successfully held above its 50-day moving average at $19.70, and on Thursday and Friday, the fund closed above a triangle formed from the January high and March low.

A quick short-term trade to the January high above $23 is likely, which would result in a gain of 18%, especially if it can rapidly take out the 200-day moving average at $21.63. Investors may consider GDX as a long-term investment in the sector for a chance at higher capital gains and a yield of 0.66%.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/04/market-vectors-gold-miners-etf-gdx-trade-of-the-day/.

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