Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Trust ETF (GLD) Looking to Rally

Commodities / Gold & Silver Stocks May 15, 2009 - 05:49 PM GMT

By: Oakshire_Financial

Commodities

Best Financial Markets Analysis ArticleGold – it is the yellow precious metal once used as a primary form of currency for thousands of years. It is durable, liquid and almost indestructible. Historically, investors have fled unstable markets in search of reliable sources of value and stability, which can generally be achieved by investing in this precious metal. For those who want cost efficient access to the gold market, investing in the SPDR Gold Trust Exchange Traded Fund (GLD) is one of the easiest means of doing so. It is the world’s largest gold-backed ETF that offers risk takers a chance to profit by establishing a position in an investment vehicle that has somewhat of an inverse relationship to the equity markets.


My role here today is to analyze the recent movements of GLD and offer my own insights as to what I believe will happen next with regards to price activity. In the chart below, I’ve drawn a thick horizontal line.

This represents major resistance. The psychological barrier near $100 should come as no surprise seeing that investors gravitate to price figures ending in either “0” or “5”. At any rate, this wall has been tested quite a few times. Instead of tripping over themselves in full retreat, the bulls gave ground to affirm the previous breakout neat $70 and bounced back to test $100/share once more.

The bullish formation that materialized as a result of this back and forth activity is known as a “reverse or inverted head and shoulders” technical pattern. I’ve marked both shoulders along with the head to help visualize this concept. For a quick reference on these setups you can click here. Technical analysis will not guarantee that the end result is bullish, but merely points to the fact that historically, this particular formation should be watched closely for a breakout to the upside.

Where will the breakout occur?

Remember when I said something about a “wall” or “major resistance” currently existing near $100; well that’s where we’ll focus our energies.  I fully expect a re-test of the $100/share mark. If GLD breaks out to the upside on above average volume, the index could tack on $30, or even $45 if we’re lucky, eventually carrying the price of this index to somewhere between $130-$145/share. If there isn’t a breakout and the index succumbs to the pressures of previous resistance, then all bets are off until the bulls step back in and attempt to crack the upper ceiling once again.

Now, since this is a multi-year weekly chart, we are not likely to see any major developments for a few months. But I can assure you that there is money to be made if you keep this ETF on your radar during the summer. We’ll revisit this when it’s time to the pull the trigger.

Good investing,

Stanley Barnes
Analyst, Oxbury Research

Disclosure: no positions

Oxbury Research originally formed as an underground investment club, Oxbury Publishing is comprised of a wide variety of Wall Street professionals - from equity analysts to futures floor traders – all independent thinkers and all capital market veterans.

© 2009 Copyright Oxbury Research - 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.

Oxbury Research Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

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