Wednesday, September 2, 2009

Gold on the Radar?

Babak of Trader's Narrative opens his latest post as follows:

While we’re on the subject of seasonality and how September is the albatross around the stock market’s neck these days, I’d be remiss to not point out that what has been historically negative for equities has been a boon for gold and gold stocks.

he follows’ll notice that during this current super-bull market for gold (which started in 2000) seasonality has shifted slightly. For these most current years (red line) there are really two big waves of positive seasonality for gold and gold stocks. The first is about to start while the second comes after a correction in October and lasts from mid-October to February of the following year.

Gold is currently in the process of forming a symmetrical triangle. An upward break from the triangle will have a minimum target move of $12 to take the ETF to the $106-107 level. An earlier call I made back in April was for a move to $118.69 based on a head-and-shoulder reversal pattern with a then stop of $84.49. That stop could now be better placed on a break of $91.40; a break of $91.40 would confirm a downward break for the triangle (and set a target closer to $79).

On the public Zignals_Alerts via twitter, GLD enjoyed a bullish crossover between 10-day and 13-day EMAs and was added to a provisional "watchlist" portfolio.

Will the next six months be kind to Gold (GLD) and its sister metal, Silver (SLV)?

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Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts, stock charts, stock screener and stock portfolio manager website

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