Conclusion, Investment Implications, Strategy

The iShares MSCI Global Gold Miners ETF (RING) is in the midst of an emerging major bullish trend change amid expanding investor asset flows and recent relative outperformance versus the benchmark S&P 500.  A sustained rise above the 26.92 area would set the stage for a potential additional 20% rise to 33.87.

Analysis and Rationale

The iShares MSCI Global Gold Miners ETF (RING) seeks to track the investment results of the MSCI ACWI Select Gold Miners Investable Market Index. The fund generally will invest at least 80% of its assets in the component securities of the underlying index and in investments that have economic characteristics that are substantially identical to the component securities of the underlying index. The index has been developed by MSCI Inc. (the “index provider” or “MSCI”) to target a minimum of 30 companies in developed and emerging markets that are involved in the business of gold mining. The fund is non-diversified.

The green highlights in the upper panel of Chart 1 below show that RING is currently rising above its 200-day moving average, a widely-watched major trend proxy, to indicate an emerging major bullish trend change.  The green highlights in the lower panel show that the daily relative performance line between RING and the S&P 500 (SPY) is coincidentally rising above its 63-day (quarterly) moving average to indicate an emerging trend of Strategic relative outperformance versus the US broad market index.  Not shown is that the daily total net assets in RING rose above their 21-day (monthly) moving average as of Oct 12th to indicate a trend of Tactical expansion characteristic of sustainable near term price advances.

A sustained rise above the 200-day MA, currently at 28.19, would set the stage for a potential additional 20% rise to the 33.87 May 19th high.

Chart 1

Table 1 below shows that considering our 33.87 upside target and a protective stop placed below the 26.92 area, a long entry price of 28.35 would provide a 1:3.9 risk/reward ratio (risking $1.00 to make $3.90) with an initial risk of 5.0%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.