Gold has been in a pretty tidy uptrend since March of 2009, coinciding with the bottom of the stock market after the 2008-2009 crash. For longer termed investors, one cannot ignore this long termed trend – as our top chart shows. Longer termed investors who can tolerate volatility have been rewarded by owning gold. As long as the longer termed trendline remains intact, gold remains a good position to own within a diversified portfolio. However, since its peak price of just over $1900/oz last year, gold has been consolidating within a rectangular pattern. For those who tend to be more active on the markets, there is a potential opportunity that has presented itself within this consolidation pattern.
I’ve marked two levels of support on the shorter termed chart, one at $1600 and the other at $1680. Both support levels have proven to be good entry points. It would appear that the market recently found support at the $1680 level. Stochastics, which is a great indicator for short termed movements, helps refine and confirm the entry and exit timing within gold’s current rectangular pattern. The recent test of $1680 was confirmed as a buying opportunity by the stochastics oscillator. Watch for gold to rally and test $1800. A price that approaches $1800, coinciding with a stochastics sell signal will provide an exit indicator for traders.
Market Call and Vancouver MoneyShow
I was on BNN Market Call yesterday (hence my inability to post this blog until Tuesday).
I’ll also be speaking at the Vancouver MoneyShow on Tuesday March 27th. I’ve prepared an intensive presentation to provide attendees with the tools needed to trade successfully in this market.