Gold Stocks Enter a New Bull Market

After reaching a multi-year low a year ago, the Fidelity Select Gold Fund (FSAGX) has now decisively advanced past a treacherous up and down trading range and started the initial stage of a potentially long-term new bull market.

The first rally came in August 2013, which signaled the end of the bear market for the gold sector. However, prices unexpectedly reversed the bullish trend in September following the highly publicized selling of gold assets by hedge funds, which also coincided with low inflation expectations.

In December, gold stocks revisited the June lows, but were able to hold this level creating a chart pattern that is known as the double bottom. From the December low the sector rallied strongly and has been making higher highs and higher lows, which is one of the hallmarks of a bullish trend. As the result, the Fidelity Select Gold Fund (FSAGX) is the best performing Fidelity mutual fund so far in 2014 with an outstanding 35.11% return.

We must caution investors that the gold sector can be highly volatile and investing in gold stocks is often regarded as highly speculative. Investing in the broader natural resources sector provides more diversification and may be more appropriate for a conservative portfolio (read more on the Fidelity Natural Resources Fund).

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Sector Rotation: New Bull Market Started for Gold Mining Stocks

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.

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

Panic Selling of Gold Continues

Why did the Fidelity Select Gold Fund (FSAGX) drop 5.54% today? The drop is the reflection of the accelerating sell-off for both gold and gold mining stocks. The Fidelity customer service confirmed, that FSAGX is not scheduled to pay dividends or capital gains distributions Monday.

The chart of the Fidelity Select Gold Fund (FSAGX) shows the validity of following a technical analysis approach when investing in funds. In our November 14, 2012 blog we alerted our readers to the move below the 100 day moving average and highlighted the need to avoid investing in this sector until a new uptrend emerges. We will continue to keep track of developments for gold to find a new entry point.

 

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

Bear Market for Gold Stocks Continues

The Fidelity Select Gold Fund (FSAGX, last change: -3.59%) was the worst performer today of all of the Fidelity mutual funds. After the oversold rally in March, gold mining stocks resumed their bear market. We will continue to track the price action for gold and look for a consolidation pattern emerging in the future.

 

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

Bear Corner: Gold Stocks Still in Downtrend, but Oversold Rally is Overdue

The Fidelity Select Gold Fund (FSAGX, last change: -1.60%) was the weakest performer in our daily survey of Fidelity mutual funds. FSAGX has made a new 52-week low today in sharp contrast to the broader stock market, which have been making steady gains so far in 2013. FSAGX has now reached oversold territory and a bounce is becoming increasingly likely in the near future.

 

Buy/sell signals for Fidelity funds are available at FidelitySignal.com

Bear Corner: Gold Mining Stocks Cannot Hold On to Earlier Gains

The market sell off continued today and the precious metals sector was one of the weakest. The performance of the Fidelity Select Gold Fund (FSAGX, last change: -3.70%) has reflected this new market trend. FSAGX broke down below its 100 day moving average and is now in bear territory. We would avoid investing in this sector until prices stabilize and a new uptrend emerges.

Technical analysis screens are provided by FidelitySignal.com

Gold Mining Stocks Correct

We have covered the bullish breakout of gold stocks since early September. The chart of the Fidelity Select Gold Fund (FSAGX, last change: -0.70%) shows that the bullish rally has stalled and a correction is taking place now. Gold needs to find a new support level in the coming sessions for the bull move to continue.

Technical analysis screens are provided by FidelitySignal.com

The Market Soars After the Fed’s Stimulus Announcement; Gold Stocks Benefit the Most

We have followed the breakout of gold stocks in our previous blog entries. The breakout continued today with the Fidelity Select Gold Fund (FSAGX, last change: 4.42%) making the largest gain of all of the Fidelity mutual funds we track after the Fed’s announcement of the stimulus package. In spite of the bullish action, we now are concerned about gold mining stocks becoming overbought and ripe for a pull back.

Technical analysis screens are provided by FidelitySignal.com

All Aboard! A New Bull Market in Gold May Have Started Already

The Fidelity Select Gold Fund (FSAGX, last change: 2.50%) is the best performing sector fund today in our daily technical analysis survey. We reported on August 31, that the conditions are ripe for gold stocks to shine again, and yesterday we observed the breakout for FSAGX. Based on the technical indicators, we believe now that gold mining stocks have reversed course and are no longer in a bear market. The strength of the breakout and the high volume of buying shows that the conditions are set for the start of a new bull market for gold. We must caution, however, that investing in gold stocks and the commodity itself carries above average risk due to high historic volatility and frequent reversals.

 

Technical analysis screens are provided by FidelitySignal.com 

Gold Stocks Break Out from Long-Term Declining Trend

We reported on August 31 that gold stocks are on the verge of reversing their long-term downtrend. The Fidelity Select Gold Fund (FSAGX, last change: 2.94%) has moved above the trendline in the last few days and is well positioned to enter a new bull market in the next few weeks.

 

Technical analysis screens are provided by FidelitySignal.com