Exchange traded funds tracking the S&P 500 and gold miner stocks are at critical junctures and a bit more momentum could propel the ETFs to further gains, a market analyst said Friday.
“Today the S&P 500 has risen above its 50-day exponential moving average following a teasing four day jaunt beneath it. The next hurdle to overcome is trendline resistance of a channel drawn down from the May 2 high,” said Tarquin Coe, technical analyst at Investors Intelligence, in a note to subscribers Friday.
SPDR S&P 500 ETF (NYSEArca: SPY) gained 0.4% Friday afternoon.
“Overcoming that level, with a close above it today, will leave the index well positioned for a rally from Tuesday. The two weeks following Memorial weekend are typically strong,” the analyst wrote.
Gold stocks were also strong Friday.
Market Vectors Gold Miners (NYSEArca: GDX) is “extending its rally from the bottom of a nine month range and the relative chart versus the S&P 500 is doing likewise,” Coe wrote.
“Conditions are not overbought and as such the bounce should continue in the weeks ahead, likely up to the top of the range at $64, some 10% from current levels,” he added.
Full disclosure: Tom Lydon’s clients own GDX.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.