PHYS and PSLV Update – 25 Mar

Gold is being stymied and the breakout appears to be on hold. PHYS, the real gold bullion ETF, is reflecting this and is carving out a consolidation triangle pattern (neon green). The up trend was nullified yesterday when a lower swing low was established. The trend is now neutral. In a triangular consolidation pattern the trend leading up to the pattern is consolidated and digested, awaitng further consensus to develope as to the viability of the trend. Picture this type of pattern as a spring lying on its side, each coil represented by the swings that bounce of the upper and lower boundary. As price approaches the appex it typically breaks out of the triangle and resumes in the direction of the previous trend. Resistance has dropped down a dime to 13.03 and corresponds to the most recent swing high. support remains at 12.66. the technical indicators are not telling us anything in particular and is the norm for a consolidation pattern.

The longer term chart is showing price just above the strong support and the breakout point at 12.73.

Silver is holding up well after being beaten back by Blythe and her Monkeys. PSLV, the real silver bullion ETF, is finding support for the 2nd day at previous resistance and the all time high of 17.29. It appears that the median line of the andrew’s Pitchfork is going to provide resistance higher, with the lower line of the fork as support. Resistance is the all time high established yesterday at 18.20, with the Bollinger band lying in between there and the current price. Further support exists at 16.45, albeit weak. RSI has dropped down from over-bought territory and is moving sideways. Stochastic is hooking hard and signaling a bearish cross of the 80 level. If support holds at 17.29, it will be constructd to the bulls and encourage further long trade entries. The fundamentals are on the bull’s side so traders beware, a break dramatically higher can happen anytime.

The Elder Impulse chart will gives a better view of momentum of PSLV. with today’s action, a blue bar is being painted due to the lack of positive slope of the MACD histogram. The MACD histogram measure the distance between the fast and slower line of the MACd indicator. Momentum is increasing when the bar is bigger than the previous day’s bar and vice versa when momentum is decreasing. as can be seen, todays histogram bar is shorter than yesterday’s. this will render a blue bar if the slope of the 13 exponential moving average (magenta) is still positive, or a red bar if the 13 day EMA is negative. A blue bar signals exit from all trades as momentum is waning. as can be seen from the previous price action, it is not uncommon in PSLV to have a single whipsaw day that calls for exit followed quickly by a green bar signalling re-entry. A decent trade would be to gamble on support holding here and enter with a stop just below 17.29. Otherwise wait for a green bar.

This entry was posted in Gold, PHYS, PSLV, Silver, Technical Analysis. Bookmark the permalink.

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