Stocks provided a relief rally on Monday, but why am I not relieved? That is because the market pulled a fast one… day gain to give investors the perception that everything is alright such that you’ll feed it more of the money it craves. But the market has one weakness that it has difficult penetrating…Gold. It is the stock market’s kryptonite, except in reverse, whereby it will save you from market weakness. May is the month for Gold, commonly rallying as volatility increases entering the summer months. Gold Fields Limited (ADR) (NYSE:GFI) shows these same tendencies.
Of the 1662 stocks analyzed following Monday’s session, 1603 advanced, 53 declined and the last 6 were neutral on the day. Gains amongst the stocks averaged 4.87% with volumes 26.5% less than the day previous. Oversold and overbought levels have been brought back to average levels at approximately 5% of stocks in each scenario. Small-caps yet again showed the greatest change in value, gaining 5.41% on average. Mid-caps and large-caps trailed behind with gains of 5.13% and 4.96%, respectively. A whopping 93% of stocks showed gains greater than 1% on the day, levels not ever seen in recent memory. And they say volatility actually decreased?
Analysis has revealed that with a buy date of July 27 and a sell date of May 26, investors have benefited from a total return of 1467.75% over the last 10 years.This scenario has shown positive results in 7 of those periods.
Conversely, the best return over the maximum number of positive periods reveals a buy date of August 8 and a sell date of March 6, producing a total return over the same 10-year range of 850.07% with positive results in 9 of those periods.
The buy and hold return for the past 10 years was 249.33%.
Comments:
As with other Gold stocks, the period of seasonal strength reveals itself around the end of the calendar year.But that’s not to say we cannot make gains now.Gold has a tendency of rallying in the month of May as volatility increases following the conclusion of Q1 earnings reports.This stock has fundamentals that are reasonable and institutions have been shown to be accumulating the stock as of recent.Targets place the value of this equity at around $15.Technicals reveal a mid-term uptrend that will carry this stock to short-term gains.
News Headlines for Gold Fields Limited (ADR) (GFI)
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Disclosure: Mr. Vialoux does not own securities mentioned in this report.
Disclaimer: Comments and opinions offered in this report at EquityClock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities.
Data offered in this report is believed to be accurate, but is not guaranteed.
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