NUGT Follow Up

There are some short term intraday signals that look like a pullback is coming in NUGT/GDX and we covered this yesterday as well in the GLD/Gold/GDX/NUGT post.

Here's the P/L for the NUGT trading position.

With a cost of $47.25 and a fill of $54.06, the gain comes to +14.4%

The reason I like NUGT is it has more leverage than GDX which has none as you know, but it's not over-leveraged like options would be and I believe this will be a longer term trending position and I don't like options for those kinds of positions especially when you really get in to a trend and have to deal with pullbacks that may be a couple of weeks, but the 3x leveraged ETFs hold up reasonably well as long as you don't get caught in a big choppy range.

 This is the NUGT 15 min 3C chart, a huge leading positive divergence so I would absolutely consider buying NUGT on a pullback.

Right now we are using the 60 min X-Over System that has all 3 indicators long. The first pullback is almost always to the 10-bar yellow average as we see above and the second and subsequent pullbacks are typically to the 22-bar moving average, that would also fill the gap (orange).

There is another gap lower, if we got to that area, then I think a double bottom "W" would be likely in NUGT, short term that wouldn't be good for trades, but longer term that would be great for a long term trending position.

Right now I have the Trend Channel set up for a 60 min trailing stop, the 60 min bar must close under the lower channel currently at $45.45, you can see it held the downtrend well. If you don't have the Trend Channel, a 50-bar 60 min moving average works fairly well, it won't work as well as the Trend Channel which will continue to lock in gains and even allow NUGT to consolidate without stopping it out.