Be Patient With Commodity Stock Entries 072908

Commodity stocks in the gold and oil sectors are having a decent pullback. Don’t try to average into these type of pullbacks without a stop. Use the 60-minute charts for entry. Yes. Here’s more on 60-minute charts, and why I’m using them in this bear market environment.

You can use the next example for entry in oil stocks, or the ETF DIG too. I’m just going to show the gold sector though. Yesterday, XAU had a backtest of the long-term trendline stretching back to mid-August ‘07. It quickly headed back down. Notice the lower highs on the 60-minute chart. Wait to buy the first higher high candlestick, and use the lower of that candle, or prior candle as a stop. An even better entry would be a higher pivot low entry that was taken a few days ago in some other sector ETFs. Patience is the key here.