  | |
| |
 |
|
| ||
Gold price - big rally to come Posted: Fri, 01 Jul 2005 [miningmx.com] -- We present an exciting-looking chart of the dollar gold price. It is pointing in one clear direction for the weeks ahead. GOLD PRICE ($) – Big rally to come Broad Recommendation: BUYTrend: Medium-term technically sideways. Short-term up. Strategy: Buy the gold price itself on a pullback, for the medium-term. ;)
Chart Setup: The dollar gold price has recently broken out of a large symmetrical triangle (lines 1 and 2). This is a very bullish event, and its recent strength is set to continue.
The daily Stochastic Oscillator (on top) is pulling back towards the oversold level, thereby giving an opportunity to buy
Strategy Details: Buy the gold price directly. Short-term traders wanting to optimise their entry, should get in on a pullback to $435/$434. Medium-term players however can buy it at current levels.
Target: The minimum upside target is $470 i.e. the height of the triangle projected up. Take profit there on medium-term positions (approx. 3-months).
Stop-loss: A close below $430, after entering on a pullback. But tighten the stop as a trailing stop as the price keeps moving higher, depending on your time frame (i.e.. short-term traders keep a tight trailing stop e.g. a break of the low of the prior two days. Medium-term players keep a wider stop).
Conclusion:
The gold price is set to rise. While one can capitalise on this move by buying the gold price itself, it also good news for overseas gold stocks. South African gold shares however are also dependent on the dollar/rand exchange rate. Assuming the $/ZAR remains steady (or even weakens slightly), we’ll see a large rally in SA gold stocks as well.
For more recommendations by the author on SA and overseas stocks, indices, and currencies please go to www.themarket.co.za.
Higher grade mining news. Straight to the point. Straight to your mailbox. Subscribe now for miningmx's free news alerts.
| |||||||
