Schaeffer's Trading Floor Blog

Gold Miners and China Join the Rally

GDX is on the upswing, with EGO rallying on expansion plans

by 4/12/2012 11:57 AM
Stocks quoted in this article:

China is starting to get a lot of attention this morning, as many of the Chinese stocks are catching a strong bid. Bryan Sapp touched on some of the rumors surrounding tomorrow's China GDP number earlier. Also, this morning, the World Bank cut its 2012 China GDP forecast, but counteracted that seemingly bad news by saying it sees the probability of a "soft landing" as very high. The GDP report out of China tomorrow is expected to be a potential market mover.

Basic materials stocks and homebuilders are once again showing strength, for the second day in a row now. A couple of new additions to today's rally have been coal stocks and gold miners. The Market Vectors Gold Miners ETF (GDX) is showing a little strength, after being a pig for quite some time. The big news from Eldorado Gold (EGO) is that it will be expanding gold-mining operations, which has the stock up more than 9% right now. This stock will be contending with the $14 level and its overhead 80-day moving average, and I'm still pretty lukewarm on the miners right now.

Daily Chart of EGO since November 2011 With 80-Day Moving Average

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