Gold: Possible Buying Opportunity
April 27th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
For aggressive investors who know how to manage risk, consider buying some gold. Here are some technical factors that I find interesting across two different intervals:
DAILY INTERVAL
1. The support at around $885.50 has held three times in recent weeks.
2. Higher lows. Note the positive slope on the line drawn between the two most recent lows. That support is currently going just under $880.
3. 61.8 Fibonacci fan line support.
4. Stochastic is in extreme oversold territory, but hasn’t yet crossed up.
8 HOUR INTERVAL
1. Stochastic has crossed up below 10.
2. MACD histogram slope has turned positive.
I would use the line described by the recent lows as the stop loss on this trade. That’s around $879 at the moment. Below that, $850 is a real possibility.
Also note the stochastic oscillator on the weekly interval (not pictured). We’re seeing a full oscillation down and it’s currently in the low 30s; not extreme (under 20) but very low by the standards of recent years.
I’ve appended the 8 hour indicators to the bottom of the daily chart.
Spot gold daily candle chart with daily and 8 hour indicators
For us less aggressive folks, I’m waiting till it hits the 50-week MA on the weekly chart.
http://stockcharts.com/h-sc/ui?s=$GOLD&p=W&b=5&g=0&id=p19426868422
Seems to be a favorite support. Not to mention that (jump in and correct me as necessary, goldbugs), this is a notoriously weak time of year, historically, for gold, I believe.
try this instead (note $gold, not gold)
http://stockcharts.com/h-sc/ui?s=$GOLD&p=W&yr=2&mn=0&dy=0&id=p12047858468
Hey Kevin..here’s one of those heads up that you will prolly understand better than me.
http://www.projectcamelot.org/why_gold_was_hacked.pdf