Gold, Retail, Oil Equipment Are Soaring

• Trang Ho
• On 7:30 pm EDT, Thursday October 8, 2009

A trio of disparate sectors -- gold, retailers, and oil and gas equipment producers -- surged to new 52-week highs in heavy trade Thursday, as the dollar slid further and same-store sales flew past estimates.

SPDR Gold Shares (CDNX:GLD.V - News) rallied 5.23% so far this week to a record high of 103.62. It eclipsed its prior high set March 2008 at 100.44, as the dollar fell to a new 52-week low vs. major currencies. GLD is up 19% this year.

"Gold forms spiked tops and rounded bottoms, unlike the broad markets that tend to form rounded tops and spiked bottoms," said Janice Dorn, a gold futures trader and founder of TheTradingDoctor.com. She suggests selling into strength and buying on weakness.

IShares Silver Trust (CDNX:SLV.V - News) shot to a 15-month high of 17.52. It's popped 10% so far this week. It trades 16% below its all-time high of 20.73 from March 2008. It's up 56% this year.

Market Vectors Gold Miners (CDNX:GDX.V - News) leapt 14% in the past four trading sessions. It closed at 48.62 as trading volume swelled two times average. GDX cleared prior resistance at 48.40 after a brief pullback to the 10-week average in declining volume. Its next resistance level is between 52 and 54. GDX is up 44% year to date vs. 18% for the S&P 500.

"Despite the record $1,000 gold prices, junior and exploration (gold)stocks are trading at levels significantly below pre-2008 sell-off levels," Peter Spina, founder of the Gold & Silver Forecaster, wrote in a client note.

Retailers

SPDR S&P Retail and Retail HOLDRs both surged to a 52-week peak in above-usual trade.

XRT, up 7.4% for the week, closed at 35.17. The 63-stock index cleared prior resistance from September 2008 at 34.72. The next level of resistance hangs above around 37. It's advanced 73% year to date. It carries a 71 Relative Strength and B Accumulation/Distribution Rating.

RTH cleared prior resistance at 84 and entered a yearlong consolidation range between the 82 and 100.

RTH, up 20% this year, has lagged the equal-weighted XRT because of its 21% weighting in Wal-Mart . Shares of the world's largest retailer have been trending lower for 13 months and are down 11% this year.

Seven of 10 retailers Thursday surpassed Wall Street forecasts for September same-store sales thanks to cooler weather, lower prior-year sales and "the Labor Day shift that probably added 1%-2% to the overall number," analysts at Lazard Capital Markets said.

Ten retailers, including Aeropostale , Kohl's and Target , raised third-quarter guidance, while none lowered earnings views.

"However, this very positive news could be setting itself up for irrational exuberance," they wrote in a report. "When retailers beat expectations by a large margin in one month, they usually miss consensus numbers in the following period (71% of the time)."

Oil And Gas Equipment

SPDR S&P Oil & Gas Equipment & Services , up 70% this year; Oil Services HOLDRs , up 67%; and iShares Dow Jones U.S. Oil Equipment Index , up 63%; each gained more than 3% Thursday. They all face price resistance at their lows from early 2008.

Oil edged above $71 a barrel Thursday on a weaker U.S. dollar.

"The crude oil markets are starting to price in higher demand, tighter inventories and tighter supply overall, in addition being supported by a weaker dollar," said Brian Hicks, co-manager of U.S. Global Investors' Global Resources Fund (NASDAQ:PSPFX - News).

That would signal a shift in the current trend of excess supply.

Energy Information Administration data show the U.S. had stocks of 337.4 million barrels as of the week ended Oct. 2.

That's 11.5% more than the same period last year.

Buzz up!