A hot seasonal play right now is gold, silver, and gold and silver mining stocks.
According to the Stock Trader’s Almanac, a good buy at the end of July is XAU.
If you look at what gold and silver has done over the last 10 years, August and September are great months for the precious metals.
I like gold and silver mining stocks right now because they’ve been beat up so bad, they are the best bargains.
The seasonal swing move up in precious metals and mining stocks may be coming a little earlier this year with XAU, GDX, and GDXJ all being upgraded to very weak uptrends.
XAU broke above its 200 day moving average on Tuesday and then confirmed the break on Wednesday, July 6th, 2011.
I like how GDXJ (junior gold miners) is leading GDX (large cap gold miners) to the upside with a confirmed break above the 200 day moving average.
A stock I bought today for my own trading account is Direxion Daily Gold Miners Bull 2X Shares (NUGT). NUGT is in a very weak uptrend. What I really like about the chart is that the Bollinger Bands are starting to widen with a break of the upper Bollinger Band. The upper Bollinger Band line was not broke in the last swing move up in May and so that suggests this upward swing move is stronger than the last.
What are my favorite gold and silver mining stocks right now other than NUGT? I like: First Majestic Silver Corp (AG) which has a strong uptrend rating, Fortuna Silver Mines (FVI.TO) which has a strong uptrend rating, and my FAV Extorre Gold Mines (XG) which also has a strong uptrend rating. I do not hold any positions in AG, FVI.TO, or XG.