Thursday, May 17, 2012

Gold Double Bottom

Gold has declined back to the lows that were produced in late December 2011 and had a reversal day which shot it up $34 for a close of ~$1575.

Previous posts mentioned that a potential uptick would occur due to the oversold RSI and Slow Stochastics readings.  Both are now heading in the upwards direction (Blue Squares), but will the trend continue?  Especially going into the summer months...?

Circled in Pink are the low points over the last 6 months which many would call a double bottom.  Is the 1530 area the bottom for Gold in 2012?  It's anyone's guess at this point.  It may be a good area to add to a position for those waiting to get into the market.  (And for those that do not believe that this bull market is over).

I'm expecting the trading range to continue until late August, early September.  The seasonals at that time may kick Gold back to the highs that were produced last year.

Gold and Silver stocks are trading at yearly lows, P/E ratios are low for many of the senior and mid tier producers.  When most people want to sell, the Wall Street sharks will gladly take your shares and anyone else that wants to cough them up.  Ride out this storm and if your want to get out, wait for the next oversold / Parabolic move in the HUI, GDX, GDXJ.  (This may be a while)

No comments:

Post a Comment