Randgold Resources Ltd (GOLD)

We predicted an uncomfortable correction in gold and recommended taking some profits off the table in our GLD ETF trade several weeks ago. We thought the quick move higher in gold would lead to a correction that was sufficiently disorderly that traders would question whether gold had topped or was simply undergoing a correction. When sentiment shifts like that it can make it hard to hold a winning position.


That is where we are now with the price of gold. It has blown through two reversal setups and that often leads to even lower prices.


But as our readers know, we believe the best money is to be made by expecting the unexpected. What if gold, which seems poised for lower prices, recovers here? Miners scored significant gains during gold's rise. Is there a miner that is acting constructively on this pullback and appears to be a good entry on a gold reversal?


The answer is yes. And the miner is Randgold (GOLD). Alone among liquid gold miners this stock has held its 50 MA. We like that it broke below a recent consolidation, appearing to threaten a more significant breakdown, but didn't follow through. That "failure of failure" can often be a good entry point.

The price of gold seems to be stabilizing this morning. Whether this represents a permanent turn or not we cannot yet know. But we'll take long entry in GOLD on a move over $80.75 with a stop under $78.