Tuesday, August 17, 2010

Gold technical analysis August 17, 2010

Here is the chart of the World Gold Index (XGLD) since April of this year with a current price at $1225.    (Click on the chart for a larger view)
  • You can see the low a few weeks ago (July 28th at 1155), the trend up and the MACD Histogram crossover on Aug 3rd circled in Red.   Bullish
  • The price is now above all three key moving averages of 15, 50 and 100.  Bullish
  • The 15 and 100 moving averages are below the 50 DMA. Neutral to Negative.
  • Both Stochastics K and D lines are above the 80 level for the 3rd day.  Bullish
  • The price broke through the last high (resistance) on July 13th at 1218.80.  Bullish
We have higher highs and higher lows and Gold is about $35 away from the all time high that was hit in mid June 2010. I would expect the trend to continue through Sept based on the seasonals and IF both Stochastics K and D lines remain above 80. If we continue for another day with both lines above 80, it will be 'embedded' or 'locked in' and the bullish trend should continue. The bullish trend is broken when the K line dips under the D line, then under 80. (So trader should keep an eye on this signal) There is no one indicator that tells you when to buy, sell or hold and commodities and stocks often get 'whip-sawed' where the price dips then heads back up.

Remember that nothing in the financial markets repeats all of the time, there are no guarantees that the Gold market appreciates into the fall. We can only follow what the price action is doing at the current time.

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