Working Money magazine.  The investors' magazine.
Traders.com Advantage

INDICATORS LIST


LIST OF TOPICS





Article Archive | Search | Subscribe/Renew | Login | Free Trial | Forgot ID?


PRINT THIS ARTICLE

CHANNEL LINES


Gold's Channel

12/23/08 01:15:05 PM
by James Kupfer

Is gold ready to break out of its channel formation?

Security:   Gold
Position:   Sell

On October 28, 2008, and again on November 18, 2008, I made the case that gold was in a very favorable position to buy. At the time I said, "Prices would likely be around $850, if not higher" by the time gold reached the top of its trend channel. Since then, gold has reached a price of $857, thus almost reaching the top band of the trend channel.

FIGURE 1: XGLD, DAILY. Gold is channeling between the black lines.
Graphic provided by: Wealth-lab.
 
Based on this move, is now the time to sell? Yes, in my estimation now is a good time to take profits. First, and most important, gold has basically reached the top of the trend channel. Second, gold is at an important resistance level predicted by taking a Fibonacci price projection of 127.2% between the last leg's low and the last swing high, as shown in orange. Finally, both the daily and weekly stochastics are overbought. See Figure 1.

Gold could well have a bit more shine left, but a top of intermediate proportions is likely near.



James Kupfer

Mr. Kupfer is a market professional and amateur stock market commentator. Disclosure: It is likely that Mr. Kupfer has or will enter a position in any security he writes about.


Click here for more information about our publications!


Comments or Questions? Article Usefulness
5 (most useful)
4
3
2
1 (least useful)

Comments

Date: 12/29/08Rank: 2Comment: 
Date: 12/30/08Rank: 5Comment: Wow!! A prediction based on technical analysis and which can be compared. This is very nice. Succinct and easy to use.
PRINT THIS ARTICLE





S&C Subscription/Renewal




Request Information From Our Sponsors 

DEPARTMENTS: Advertising | Editorial | Circulation | Contact Us | BY PHONE: (206) 938-0570

PTSK — The Professional Traders' Starter Kit
Home — S&C Magazine | Working Money Magazine | Traders.com Advantage | Online Store | Traders’ Resource
Add a Product to Traders’ Resource | Message Boards | Subscribe/Renew | Free Trial Issue | Article Code | Search

Copyright © 1982–2020 Technical Analysis, Inc. All rights reserved. Read our disclaimer & privacy statement.