"Gold stocks are officially overbought at current levels. But, what most traders and investors do not understand is that during a bull market stocks will be, and remain, overbought the majority of the time. In many cases, stocks will only pause before moving higher. This means that selling positions or shorting gold stocks in anticipation of a pullback is a losing position most of the time. The better play is to wait for the bullish percent index to pull back. Subsequently, then start to turn back up before buying or adding more gold stocks to your portfolio. During the early stages of the bull market is when chart patterns for stocks and breakouts of these patterns are most accurate and tradable. Breakout trading has been out of favor for years in both gold stocks, and the overall stock market in general because of the Stage 1 basing phase gold has been in, and the Stage 3 topping phase the US stock market ...." http://news.gold-eagle.com/article/gold-and-gold-stocks-overbought%E2%80%A6what-expect/313