Market Forecast

Stocks have been performing quite well lately and we have been reaching new highs day after day. Some stocks though have run up too far too fast and are due for a small correction. Below I have a chart of the Dow Jones Industrial Average and I've outlined the pattern that is being formed, and a very rough forecast of where it is expected to go in the next week or two. I suggest that it's time for taking some profits and raising some cash for when the market as a whole goes 3-5% lower..

Eldorado Gold (TSE:ELD) (NYSE:EGO)

Eldorado Gold is now my number 1 play on rising gold prices. It's one of the cheapest gold producers in the world, and a very well run company. They recently purchased Sino Gold, another low cost producer mining in China. I previously recommended Yamana Gold (YRI/AUY) and the GLD fund. Which have all had great runs since. I think Yamana has had a great run which is why I think it's time to sell that one, because it is not a top tier gold company.
The GLD ETF (Exchange Traded Fund) which tracks the price of gold is still buy, as gold is going higher. Some analysts are saying it could go to $2500/ounce which is quite possible since interest rates are low and are staying low for some time, and the world has been printing money off like crazy.

Eldorado is currently priced just a few cents away from $14. They are the lowest cost producer, and for every dollar that gold rises, it's a dollar in their pocket. Eldorado is constantly increasing production, which means they are also growing along with the price of gold. The stock is an excellent long term play, and they are benefitting highly from the rise in gold. Eldorado is a buy at any pullback. The stock is going to $20.

Wynn Resorts (NASDAQ:WYNN)

Back on September 14th I told you that Wynn was a buy. The stock was at $65 then and is now trading at $69. I also told you that if the stock dropped below the $55 mark it would be huge buying opportunity, which you had near the end of October when the stock dropped to the $53-$54 range for just a few days.
So do I still think Wynn is a buy? Wynn is even more of a buy now than it was when I first recommended it. The company has a lot of cash in store and very little debt, especially relative to its casino peers LVS and MGM. China Macau casinos have stabilized and are helping Wynn turn up profit. Even Las Vegas casinos are stabilizing, and will begin to show some growth possibly in the next year, which is something to look forward to in 2010 that could send the tock higher.
But right now there's even more good news. Wynn Resorts is declaring a special and massive $4 dividend with ex dividend date Nov 17 2009. At the current stock price of $69, that's a 5.7% yield just for holding the stock at the close on November 16th. The company also said it would start paying a $0.20 dividend beginning in 2010. They simply love shareholders.
But will the stock tank after the dividend has been paid out? Wynn's technicals are also looking great right now, which I think can send the stock soaring further. Wynn was upgraded last week to a Buy by Deutche Bank, which a target price of $80. Personally, this target is a bit low. Take a look at the chart below. Wynn has once again just broken through its 50 day moving average. If you look back, each time it has done so, the stock has moved up $20-$30. I can see Wynn between the $90-$100 by year end.