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by James Kupfer
Is gold ready to break out of its channel formation?
Position: Sell
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.
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CHANNEL LINES
Gold's Channel
12/23/08 01:15:05 PMby James Kupfer
Is gold ready to break out of its channel formation?
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. |
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| FIGURE 1: XGLD, DAILY. Gold is channeling between the black lines. |
| Graphic provided by: Wealth-lab. |
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| 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. |
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.
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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.
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