Don't miss a second chance in gold
If you missed the gold run in 2009, don't beat yourself up. Gold profits this year will blow last year's away.
By John Lansing, InvestorPlace.com
Some of the biggest profits this year will come from gold stocks. That's right; to my mind, gold is the No. 1 sector to invest in for 2010.
Gold has risen for nine straight years without a single year of negative returns, and this year will be no different. And gold is NOT a U.S. dollar story. It isn't rising against the dollar alone. It's hit new highs recently against currencies around the globe.
The profits to be had in this sector could be bigger than last year's -- if you invest in the right gold stocks.
Longer term, gold is in a parabolic run, and my target for the metal is for it to go to at least $1,800 to $2,000 an ounce in the second half of 2010 or first half of 2011. Here are the best ways to profit from this trend.
Gold Stock #1 -- Allied Nevada Gold (ANV)
The lack of overhead supply of the gold stocks on this list is what makes the potential for their move up so monumental. When stocks are making new all-time highs like ANV is, you don't run into what I like to call "pissed off supply." You see, when investors buy a stock during a long bullish uptrend, and then that stock starts to sell off, people who bought on the upswing and held it through the downtrend look to sell at their first chance to break even when the stock starts to head back up, thus creating huge resistance. But when a stock is breaking out to new all-time highs, you don't run into that problem, because no one has ever owned the stock at these levels.
My target for ANV is in the mid-$20s.
Gold Stock #2 -- Rubicon Minerals (RBY)
Gold exploration company Rubicon Minerals (RBY) also broke out to new all-time highs in 2009, and currently has no overhead supply or resistance. Here the Moving Average Convergence/Divergence (MACD) tells us that RBY looks to be in a parabolic move up and is showing no negative divergence.
My conservative target for RBY is $9, which is a near double from current levels, but I expect the stock to clear that target and head even higher.
Gold Stock #3 -- Entree Gold (EGI)
Next is exploration-stage company Entree Gold (EGI). EGI is in a very rare, bullish reverse symmetrical triangle. This chart pattern has a failure rate of only 2%, which means there is a 98% chance that the stock will be successful in reaching the top trendline around $6. (And for details on two more gold stocks to buy now, read "5 Gold Stocks Set to Double in 2010.")
At the time of this writing, John Lansing did not own shares of ANV, RBY or EGI in personal or client portfolios.
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Stocks drift lower and bonds are hit as investors await the Fed. Prepare for higher volatility this week.
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