Sunday, February 15, 2009

Where is gold headed ?

I have been doing some research on technical analysis over the past few months - using technical indicators and marketclub triangles to figure out directions of some common names.

With the decline in stock markets , Gold has become a safe haven for investors and has recently sparked a rally. I usually track value of gold using the ETF GLD.

Marketclub's weekly trade triangles are pointing to an uptrend with both the weekly and daily triangles being green. Here is a weekly chart of GLD.



Let us use the common technical analysis signals using stockcharts.com's interactive signals


The trend line in solid blue indicates strong uptrend however the MACD and ROC signals indicate almost oversold signals.
The stock chart is above the indicator for 20 and 50 day EMA. For a horizon of a month or so the stock looks to be in uptrend with dips.

For a longer horizon the charts below seem to suggest that GLD is well above its 200 day EMA and also broken a key downturn trend.

Do you think Gold is overbought?

Disclaimer: I am currently long GLD. The above indicators are the authors view of the trend from various sources and investments should be based on risk and self assessment.

2 comments:

mlomker said...

From an Elliot wave perspective GLD is at the top of a B wave. We should have a C down to the low $600's per ounce on gold.

One working theory is that stock market losses will force gold sales, just like the November plummet caused absolutely everything to deflate.

I'm planning to buy some GLD in a month or so when that occurs.

Tapan said...

Hi mlomker. Thanks for the Elliot wave perspective. This might be been an unusual B wave which almost equalled wave 5(assuming wave 5 was the market high of around 1024 last year).