Gold Stocks: A Pullback of Significance
Contributed Opinion

1. Stewart Thomson: I, or members of my immediate household or family, own securities of: GDX. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.
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Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:  

Are You Prepared?

Another exciting gold bull era day is underway, but this time the excitement comes from substantial "overdue" corrective action.

Here's a look at a key chart that highlights the move: 

Gold could continue rallying up towards $4600-$4700 before there's a pullback that is large enough for investors to buy.

If that pullback begins now, modest buying can be done in the $4050-$3950 zone.

For the CDNX and associated junior miners, a bit more patience could be required. Here's a look at the daily chart: 

The 814-756 zone would be a great entry point for investors who have yet to partake in this incredible gold and gold stocks bull era.

Another solid play would be to buy a breakout above the recent 1037 area highs, and this chart shows why that zone is so important: 

A breakout over 1037 would be a good sign that the CDNX is going surge over the neckline area highs at 1100, likely launching one of the greatest bull runs in the history of markets.

One of the nicest facts about the juniors sector is that on big down days for gold, the SP500, and for the CDNX index itself, many individual issues can stage big rallies.

Here's an example of what I mean: 

Lux Metals Corp (LXM:TSXV; BBBMF:OTCMKTS) (formerly Huntsman) is pursuing a new project in Saskatchewan and the bull wedge action suggests there may be good news coming.

Small grub stake positions (very small) in this technically exciting speculative stock could be purchased here.

Here's a look at another "sleeper," Novo Resources Corp. (NVO:TSX.V; NSRPF:OTCQX) on the monthly chart: 

Note the "gulag" that formed after the huge bull wedge breakout.

That gulag is where value buyers began accumulating the stock, and I issued a buy recently at about 10 cents.

I liked the early Novo story, but felt it would take years to develop, so I issued a "NoNo" (sell) alert at about $8.

At this point, if the CDNX roars above 1100, it looks like Novo could surge to $2, and maybe to $4.

Here's the weekly chart: 

The breakout from the gulag occurred about two weeks ago and the volume is rising.

Here's the daily chart: 

The spike in volume is clearly apparent on this chart.

Note that it began ahead of the breakout. Volume is almost always a telltale sign, especially when with junior miners, and the good news is that I'm not seeing much "blowoff" volume on most of the juniors, even after this year's mighty surge!

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