I get questions regarding these commodities often enough that I thought I’d present their current technical picture. Here goes:
Gold has a big wall ahead of it before we can say it’s out of the consolidation that it’s been stuck in since 2013. Despite the recent excitement (in December I suggested it would rally on this blog) the commodity has a long history of hitting about $1360 and failing. Below is the updated chart I presented on my early December blog suggesting a rally. If you take a look at the current picture, the commodity looks to be getting overbought again. Yet, it is not quite at its $1360 ceiling.
My thoughts are that gold may still get to that target, but the indicators that I follow (moneyflow momentum, momentum oscillators ) along with that massive ceiling suggest little more upside beyond that. Only cumulative moneyflow looks to be turing positive enough to warrant a longer termed bullish outlook. And that is precarious.
WTI crude oil looks like it is bouncing off of an oversold level. Stochastics is hooking up, while the longer MACD indicator is also hooking up. It recently bounced off of $42 support on those oversold hooks. Cumulative moneyflow (first pane below price chart) has been raggedly moving up since 2016. The top pane (moneyflow momentum) may be hooking up from an oversold level. Significant resistance resides right around current prices at $55/barrel. However, with the other positives on this chart we may see WTI break through $55.
It’s going to take something fundamentally significant to give it that impetus, but the charts do provide some hope for that. Should a story develop for the commodity – we could see $70. Please note that there is a big “IF” there—regarding a fundamental catalyst. At this point, I’m not aware of anything big enough to move the needle—and I would be happy to read your thoughts on this potential in the comments section below.
Keith on Bloomberg/BNN TV Thursday January 24th, 2019 at 6:00pm
Keith appears regularly on BNN Bloomberg MarketCall to answer viewer questions on the technical analysis of stock trends, and to provide unique insights on the factors of technical analysis used in successful investment management. (Note: Times and Dates may be subject to change)
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Are you in Orlando in February?
If you are in Florida as a visitor, a snowbird, or as a resident, you might like to attend the MoneyShow. I’ll be speaking at the Orlando MoneyShow on Feb 8th at 3:00pm at the Omni Resort at Championsgate. If you haven’t been to that resort, it’s quite lovely–and parking is free! The link below references my talk: