Two Golden ETF Opportunities

Right now, there are two ETFs we like for buy entries.

The first is the Market Vectors Gold Miners ETF (GDX - commentary - Cramer's Take), which is composed of a basket of individual gold-mining stocks. On the daily chart below, notice how it's breaking out above the high of its tight consolidation of the past three days.

GDX Daily (NYSE) Market Vectors Gold Miners ETF

Click here for larger image.

Source: TradeStation

With the GDX now above its 50-day moving average, it can be bought on any small pullback. Ideally, the $25 to $25.50 area represents an ideal buy point because the prior high from Nov. 5 (marked by the blue horizontal line) should now provide support as well. Since the GDX closed just above the high of its short-term consolidation, it's not even too late to buy near its current price.

A sibling of the gold-mining ETF, the SPDR Gold Shares (GLD - commentary - Cramer's Take), is forming a "bull flag" pattern after breaking out above its 50-day moving average. I have annotated the pattern on the daily chart below.

GLD Daily (NYSE) SPDR Gold Shares

Click here for larger image.

Source: TradeStation

Presently, the GDX is showing a bit of relative strength to the GLD because it already closed above its Nov. 24 and Nov. 25 highs, but the GLD has not. Nevertheless, it's probably not a bad idea to take positions in both the GDX and the GLD, as the gold-mining stocks and spot gold tend to oscillate back and forth in terms of which ETF shows the most relative strength. Having shares in both ETFs enables you to make sure you are positioned in the strongest one.

I have no positions in the ETFs discussed, though I do have a position in the PowerShares DB Gold Double Long (DGP - commentary - Cramer's Take), which is similar to the GLD.

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Know What You Own: Wagner mentions the Market Vectors Gold Miners ETF, and three of the top holdings in that ETF include Agnico-Eagle Mines (AEM - commentary - Cramer's Take), AngloGold Ashanti (AU - commentary - Cramer's Take) and Barrick Gold (ABX - commentary - Cramer's Take). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

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At the time of publication, Wagner was long the PowerShares DB Gold Double Long.

Deron Wagner is the founder and head trader of Morpheus Trading Group. His daily focus is managing and trading the Morpheus Capital Hedge Fund, which he founded in April of 2004. He is the author of the new book, Trading ETFs: Gaining An Edge With Technical Analysis, and he also teaches his trading methodology with The Wagner Daily, The MTG Stalk Sheet, and The Wagner Weekly newsletters, available at morpheustrading.com.