-- Posted Monday, 27 April 2009 | | Source: GoldSeek.com
Last week was interesting with precious metals stocks finding support and moving higher to close above resistance on Friday.
Not much has changed in the past few days other than the BP chart (bullish percent index chart) for gold miner stocks which has put in a short term bottom. If gold continues to push higher above its resistance trend line I think we could see gold stocks follow suit and eventually out perform gold.
The BP chart can stay in the upper zone for several months as gold & gold stocks run higher at an accelerated rate.
Gold Precious Metal Bullish Percent Chart
Gold GLD Precious Metal Fund
Gold continued to move higher on Friday closing above two key resistance levels. Gold closed above my resistance trend line and 50moving average which sets a bullish tone.
What makes me excited is that gold rallied with the broad market. I mentioned in a previous report that when the broad market is so over bought and ready for a correction people were starting to put their money into gold because it’s known as a safe haven. In the past the broad market would rally and gold would go down; if the broad market pulled back, gold would rally.
So with Fridays rally in both gold and the broad market it says a couple things to me.
- Friday was light volume and only buyers were sticking around buying the market higher.
- Broad market is over bought & at resistance, smart money is moving into gold.
Gold Precious Metal Trading Conclusion:
Gold and the broad market have set the stage for another rally in gold with the broad market moving lower over the next 3-6 weeks. I do not think the broad market will make a new multi year low but I think will correct 50% of this current rally.
I can see gold testing the $1000 mark again but do not think it will breakout and rally much higher. This is because if we get a controlled pullback in the broad market over the next 3-6 weeks and stocks start to rally again confirming a bottom in the stock market then I think we will see a lot of money get pulled out of gold and put into equities.
We should have some exciting movements this week with gold testing resistance and oil staring to move higher in its final stages of a cup & handle formation.
If you would like to receive my free trading reports please visit my website at: www.GoldAndOilGuy.com
Chris
-- Posted Monday, 27 April 2009 | Digg This Article
| Source: GoldSeek.com
