Best Financial Markets Analysis Article As the equity markets continue their death spiral, gold becomes more attractive. This argument is clearly demonstrated by the chart. At this point, the Street TRACKS Gold Trust Shares (GLD) chart indicates Gold may be poised to go higher.

GLD shows a series of lower highs and lower lows. At first glance, this might be disconcerting to the technician. This formation is called a broadening wedge. Generally, a move above the top trendline can be played to the long side, while a trade below the bottom trendline can initiate a short sale.

There are other factors that favor a possible breakout for GLD. First, the 50 day moving average is about to cross the 200 day moving average- the fabled golden cross. Second, since October, the stock has been carving out a cup with handle formation.

Traders can play GLD two ways. They can wait for a break above the handle high of 87.10, or they can buy GLD on a trendline break as shown on the chart. Either purchase should be done on higher than average volume

By Kingsley Anderson

http://tradethebreakout.blogspot.com

Kingsley Anderson (pseudonym) is a long-time individual trader. When not analyzing stocks, he is an attorney at a large law firm. Prior to entering private practice, he served as a judge advocate in the U.S. Army for five years and continues to serve in the U.S. Army Reserves. Kingsley primarily relies on technical analysis to decipher the markets.
Kingsley's website is Trade The Breakout (http://tradethebreakout.blogspot.com)

© 2009 Copyright Kingsley Anderson - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Kingsley Anderson Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.