Wednesday, January 7, 2015

Gold Inverse Head and Shoulder Awaiting Breakout

Click on Chart to Enlarge

Based upon the current action in gold and gold stocks it appears likely that gold will continue to form a major rally.  The daily chart pattern has the appearance of an inverse head and shoulders that has yet to break the neck line.  From a time cycle and chart structure standpoint, it appears to me that the breakout is close at hand.

I do have a bias here in that I have call options on silver as previously stated on the blog here.  My expectation is that metals will continue higher for the rest of this month.  I feel that there was and is still a quality chance for an excess of 100% return on call options prior to expiration.  But for some added time for things to unfold, I think a March or April call option would be sensible as well.

A break in the metals above the December highs could be a technical chart point of recognition resulting in either a failed breakout, or in my expectation, a continuation of the uptrend.


1 comment:

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