The situation with Gold could be hotting up. So I thought it opportune to update you on the GOLD ETF traded on the Australian Stock Market.
The first chart is a relative strength chart of Gold:XAO. (This is Gold in Ozzie Dollars – investable through the ETF Gold on the Australian Stock Exchange.) For several days Gold has been traveling between the key 55-Day Moving Average and the down trend line from May09. The chart is also showing very little volatility – usually a sign that a big move is coming.
The Gold ETF (second chart) has basically been traveling sideways and this consolidation is now in a clear symmetrical triangle pattern. This can break either way. It is, however, close to a break upwards.
The third chart is a short term chart showing Gold with technical analysis indicators. The stock is above the 150-Day SMA; the MACD is above the Zero line.
The following are all positives for Gold:
- · A break above the 55-Day MA on the Gold/XAO ratio chart,
- · A move by the MACD above the Zero line,
- · Williams %R above its mid-line,
- · RSI above its mid-line.
All I need now is a break above that symmetrical triangle. (This would also constitute a “sell” signal for the XAO.)
Remember – anything can happen in the stock market. Two of my guiding principles are:
- Let your winners run.
- Cut losers quickly.
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