Gold is starting to look a little tarnished over the last couple days. After hitting multi-year highs earlier this year the sell-off has been a little more than I like to see to keep it in the uptrend. Looking at the Gold Index, it topped in February, and then sold off, bottoming at 375. Notice also that the 20-period moving average has been resistance on the few small rally attempts it has tried over the last month and a half.

Gold Index

In order to verify, I took a look at some of the stocks that make up the gold industry group. There are several stocks that have the same characteristics as the sector. Newmont Mining (NEM) is a perfect shorting candidate. Like the Gold Index, Newmont Mining topped in February and started to sell off. It tried to rally mid-February, was stopped by the 20-period moving average, and then sold off to take out its short-term support. Again, last week it attempted to rally, but seems to have lost its momentum. I feel the next leg is down. If there is a violation of Fridayââ,¬â"¢s low, the 42 level should be targeted.

Newmont Mining Corp

Below are several other gold stocks that have similar patterns.

Anglogold Ashanti

Gold Fields Ltd

Harmony Gold Mining

As usual, be cautious and use stop orders to protect your profits and principle.

Disclaimer
The article submitted to the Tiger Shark Publishing LLC is presented for informational purposes only and should not be construed as a solicitation to buy or sell securities or securities derivatives of any kind, nor serve as any type of investment advice or strategies. Actual results may differ greatly from expressed opinion. The author expresses a personal opinion and will not assume any responsibilities of the action of the reader.

Tom Incorvia is a swing trader with 18 years of experience in the financial markets.  E-mail him at tincorvia@gmail.com.