Monday, May 14, 2012

Gold - Bottom soon?

Gold is still in a sell off downtrend which may be bottoming out soon ?  Sometimes a stock will over shoot to the upside and to the downside before a reversal. Gold may produce a double bottom near the $1550 level which was near the end of December 2011. (Indicated with the light blue line)

If there is a breach through the $1550 area, Gold may do a 100% retracement back to the low point before last summers rally which would be near the $1475 area.

The 50 dma crossed over the 200 dma a few weeks ago indicated with the red arrow.  RSI and Slow Stochastics are oversold, so a rebound to the upside may be realized within a week?  That is unless the sell off continues and the Slow Stochastics become embedded to the downside.

This may be a good time for shorts to cover their positions? Going into June and July, more consolidation and volatility is probable.

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