Is your portfolio heavy metal?
Let me translate…
Do you own mining stocks? If so, you’re probably having a great year.
Since the start of the year, uranium stocks have surged 30%. Silver miners are up 36%, while copper miners have rallied 33%.
These are big moves. We’re not even two months into the new year. But I have every reason to believe mining stocks are headed even higher.
Let’s rip through a few charts…
The first one shows the performance of the State Street SPDR S&P Metals & Mining ETF (XME). This fund invests in a wide array of mining stocks, including copper, uranium, and aluminum names.
XME recently pulled back into its rising 50-day moving average. Buyers stepped in, and now XME is close to breaking out of a multi-week bull flag.
Source: StockCharts
Miners look even better when we drill into the individual groups…
Check out the Global X Copper Miners ETF (COPX). It just broke out of a bull flag, and it’s on the verge of hitting new all-time highs.
Source: StockCharts
Silver miners are also on the run. The Global X Silver Miners ETF (SIL) is up 22% this month and also on the verge of breaking out to new all-time highs.
Source: StockCharts
Next up is uranium miners. The Global X Uranium ETF (URA) just recently broke out of a bull flag after retesting its 50-day moving average.
This tells me that uranium miners are setting up for another big run after storming out the gate this year.
Source: StockCharts
Commodity prices also point to an ongoing rally.
The Invesco DB Commodity Index Tracking Fund (DBC), which tracks a basket of different commodity prices, is looking more and more bottomed.
Source: StockCharts
Higher commodity prices are obviously bullish for mining stocks. So, I wouldn’t look to fade this rally any time soon.
In fact, yesterday, I added a new energy name to my Express Trader portfolio.
Energy stocks—including my recent pick—have been some of the most resilient performers in this year’s uncertain market. While the major indexes chop around, money continues rotating into this space.
If you’re not familiar, Express Trader is designed to be simple. At the start of the week, I send members my top three trades, along with clear entry points and stops. It takes less than an hour per week to take advantage of this advisory.
Justin Spittler
Chief Trader, RiskHedge
