The chart pattern for the Fidelity Select Gold Fund (FSAGX, last change: 5.22%) has turned positive and we think that the sector is in the beginning stages of a new bull market now. FSAGX is making higher highs and higher lows, while clearing the 100 day moving average too. We wouldn’t be surprised to see a pullback in the next few days after the recent strong performance, which should provide investors with new opportunities to establish positions.
The panic selling of gold continued again today and the Fidelity Select Gold Fund (FSAGX, last change: -4.31%) was the worst performing fund in the FidelitySignal.com daily survey. In addition, multiple equity sectors “rolled over” in recent sessions and are in danger of entering a bearish downtrend. These events, taken together with the bubble-like rise of the Japanese stock market point to a highly unstable market environment. Unless the equity markets stabilize in the next few sessions, we see an increased probability of a serious correction or even a stock market crash.
The Fidelity Select Gold Fund (FSAGX, last change: 2.04%) was the largest gainer of all the Fidelity mutual funds today. In spite of today’s jump, FSAGX is still in a downtrend and we would not turn bullish until the price climbs above the 100 day moving average on the chart.
The Fidelity Select Gold fund (FSAGX, change: -3.68%) dropped into bearish territory today, as the gold bullion sold off on high volume mirroring the sell off in global equities. In the last three months, gold investments did not offer a hedge against stock market declines.
All Fidelity sector funds gained today, with the exception of the Fidelity Select Gold fund. The top gainer was the Fidelity Select Automotive (FSAVX, up +2.88% today) fund.
However, the sector fund with the most bullish momentum is the Fidelity Select Retailing (FSRPX, up 1.03% today) fund. FSRPX moved above its 100-day moving average today, although only with a narrow margin. We’ll be tracking this fund closely to see if retailers can provide leadership for the market.
Today’s losers were bond funds and gold. We’d like to see the current rally in stocks extend beyond the weekend before we can evaluate the potential of a change in the market trend.
A decisive move above its resistance level can turn the Fidelity Select Retailing (FSRPX, up 1.03%) fund into a momentum leader.