Gold – 26 Jan

Paper gold closed up again an another big volume day. The only thing keeping a lid on the price at this point is the Bollinger band. 1760 awaits as overhead resistance. Support is coming from the 1670 area and just below there around 1650 where the 18, 45, and 200 day moving averages are clustered. RSI is just about at over-bought at 68. Nothing new on stochastic, still embedded. If we have a lower day and stochastic looks to cross the 80 level, the nearest moving average will be the target. In this case it looks like it will be the 18 day MA which is climbing sharply to catch up with price. the short term uptrend remains intact as long as the swing low at 1660 holds. If I were trading paper I would have been long since the reaction swing low at 1600. That means I would have captured $120 dollars of price movement. I would be thinking about unloading some of the longs with price above the Bollinger band. The odds that it remains of the Bollinger band are only 2.5%, not a good bet. Also, my stop would be just below 1660 and I would lose a lot of profit waiting for that stop to trigger in the event of trend change.

But of course I am not a paper trader anymore, so it is the expanded charts that hold my interest. It is clear the breakout is confirmed and is for real. Two closes above the trend line on heavy confirming volume. 1760 has to fall to break the trend of lower highs. Significant resistance is going to come from the 1760 -1800 area. I would like to see a swing high in that resistance zone and then a reaction swing low somewhere above that  down trend line.

The weekly chart shows the long term situation and it looks real good for a move to the middle trend line in the up channel. I like this price level during the next 4 weeks or so. The technical say we have this move and more available. RSI at 55, stochastic at neutral, and MACD climbing into a bullish cross. Buyers of the panic are being handsomely rewarded. I am accumulating cash for the next 10% correction. Just say no to paper, buy the real thing and prepare for Freegold.

This entry was posted in Gold, Matrix Sentry TA, Technical Analysis. Bookmark the permalink.

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