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GOLD making the long term turn?

January 26, 2009
tags: , , , , , , , , , ,

I can’t blame you for if you’ve been sitting out of this market.  It’s been pretty brutal and even if the downward plunge of 2008 may be finding a footing, it has still been far from ideal for all but the short term traders.  But here’s something that even those solely longer term focused should be paying attention to.

Gold.  Long term chart shows a big flag pattern of sorts.  After pulling back above the 30 week MA some weeks ago, this past week marked what seems a quite significant break of the most pressing downtrending resistance.

Even on the daily chart, gold is uptrending for three months and recently gave three fresh green arrows for those who like that system. Volume on Friday’s break above horizontal and diagonal resistance was on very high volume.

The XAU does have long term resistance in the form of the underside of the old support from back in ’06/’07 and the support line from its bottom in October 2000. Nevertheless, like gold itself, the group shows three green arrows and a three month uptrend.

The Gold Market Vectors ETF, GDX, shows a very similar chart.

It is interesting to note that the Gold stocks have drastically underperformed the price of gold over the last year. Obviously, the entire stock market being hammered is a big factor in gold stocks being sold off. Nevertheless, the it would seem logical that if the price of gold moves significantly higher from here, the gold stocks could possibly rise even more so.

Here are a few strong looking stocks, particularly from the 3 green arrow perspective. They are in alphabetical order.

GG seems a favorite among talking heads on TV. Regardless, note the potential resistance here and the less impressive volume on Friday than some others.

KGC is under a significant resistance line that goes back to ’08 as resistance and support. What is interesting to me about this is that it has had very high volume for the entirety of last week. If gold and the group don’t follow through on the breakout higher, this one could be an interesting short.

Not surprisingly, Silver also had a big day on Friday.

Some silver stocks that look good.

One Comment leave one →
  1. Mike permalink
    March 2, 2009 3:31 pm

    Just passing by.Btw, you website have great content!

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