NEW YORK ( TheStreet) -- A Goldman Sachs analyst called gold a "slam-dunk" sell, but Alan Knuckman of Trading Advantage tells TheStreet's Jill Malandrino that he doesn't agree with that.
Based on price action, Knuckman said gold looks attractive, especially if it continues to hold the $1,300 level, which it has on a weekly basis.
A more important level would be $1,350 since it is the midpoint between the most recent highs and most recent lows.
To take advantage of a move higher, he suggested buying the January $20 call on the Market Vectors Gold Miners ETF (GDX), which currently trades near $24.50.The GDX has solid support at $24 and the $5 call option is only 50 cents away from break even. A move back to the $28 midpoint would return 60%, Knuckman said. Regarding crude oil, he is watching the $100 level, which has acted as support. If oil moves higher from the $102 pivot level, he suggested it could go to $105 and possibly $110. If it clears $110, then $120 is a possibility. To take advantage, he suggested purchasing a $105/$110 call spread for $1,500. With a maximum value of $5,000, the spread value could increase quickly if crude oil starts to push higher. Knuckman concluded that for both commodities it makes more sense to be a buyer near the bottom, rather than a seller, because of the upside potential. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell