Gold Ready to Blow the Lid Off?

Gold has been trading in a relatively tight range near its all time high. Look to the left of the chart of the gold ETF, GLD, and you will notice gold challenged its high three distinct times, each time it pulled back, and after the third time it turned tail and went into a new correction.

Gold went on to shape a cup shaped base and then attempted to break out. Again, it teased us and pulled back, causing me grief as I purchased the pretend break out. After a dip, it again, for roughly the fifth time, attempted to go higher but could not.

All the while, silver, gold's shiny sister, broke out and cruised higher. See an earlier post I made recently on silver. It broke to new highs and would have been very profitable if you bought it. I am not including silver's chart here so as not to confuse the issue of gold.

Now, after five distinct attempts at surging to new all time highs, gold is bobbing above it's 21 day EMA (the blue trend line). It appears to want to go higher. I'm already in it, but you could wait for confirmation to see if it breaks out for real this time.

We'll see if it joins silver in a run up to new highs.

Same List as Yesterday Still Applies

Well, almost all apply. I wasn't thrilled with SOHU's movement. It broke out then reversed 2.8% for the day, below the buy point, very negative action. However, it could still right itself. I'd just look elsewhere for now.

RAX blew out of the starting gates and ran up 8.3% for the day. This puts it 5.5% above it's buy point. Ouch, that was fast. If you snagged it, good for you. You are looking solid. It could offer a second chance to buy if it pulls back, but it may just keep going. You had to be quick on this one as it bolted above the buy point at the opening bell.

I'm upset I missed this one. I didn't start looking at the market until 8:30, and RAX was further along than I felt comfortable buying, especially given my recent experiences buy stocks more than 3% past their buy points in the past rally attempt. So I'm a little gun shy at the moment. I want to stick these stocks as close to their buy points as possible to guarde against unwelcome surprises.

BIDU is still in buy range, although the day's action wasn't very strong.

CMG looks ready to shoot higher, keep an eye on this one. Chart is below. See how close we are to the most recent high, the left side of the base. I was tempted to buy this one today in anticipation of a break out, but that would break my (IBD's really) rules, so I held off.

NFLX is another stock itching to break out. Keep in mind this has had a long run and is in a late stage base. However, it has been a true market leader, so I expect it to go higher if the market does.

Watch These IBD Style Stocks

As I emailed yesterday to my IBD Meetup Group, IBD had not called the current market an uptrend, yet a number of stocks were breaking out, demonstrating a return to risk appetite.

Today, IBD recognized this trend and changed their outlook to market in uptrend. Among the reasons were those mentioned above as well as a high volume move by the Nasdaq Thursday.

I rarely buy breakouts without IBD confirmation that the market is in an uptrend, but given the strength, I jumped on OPEN and made a quick profit. It's out of buy range now but could pull back a little. I also bought BIDU, sold it at no profit no loss as at the time I didn't want to push my luck without the market being in a technical uptrend. I was afraid the market might pull back at any moment.

The market may still pull back, but it shows resilience. Therefore, I have put together a watch list of stocks that meet IBD criteria. These stocks not only show tremendous growth, but they are consolidating and readying for a move higher. A couple have already broken out such as OPEN and BIDU.

Stocks consolidating:
BIDU
CMG
DAR
DE
LULU
NFLX
OPEN
PCLN
RAX
SLW
SOHU
SOLR
WLT

This Baker's Dozen list of stocks are showing very positive movement. BIDU, OPEN, LULU and PCLN have all broken out. Only OPEN is technically out of the 5% chase range.

Some of the stocks above look like they are itching to move higher or break out like BIDU, PCLN (looks like $500 is a near certainty), CMG (got shaken out of this before, but it's resilient), RAX and SOHU. SOHU is a stock that broke above its buy point but closed below it today. While not ideal action, it can still lead to a positive move higher. In fact, LULU did just that Monday and finished 4.6% over its buy point.

Take care because the market is near resistance levels. It could power through these, or just as likely pull back.